Nokia (www.Nokia.com) is a leading global manufacturer of mobile devices and services. The following selected information is
Question:
(Euro millions) Current Year Prior Year
Current assets . . . . . . . . . . . 23,613 ....... 24,470
Current liabilities . . . . . . . . . 15,188 ...... 20,355
Required
1. Compute Nokia’s current ratio for both the current year and the prior year.
2. Comment on any change from the prior year to the current year for the current ratio.
Step by Step Answer:
1 Current ratio Current year 23613 15188 155 Prio...View the full answer
Fundamental Accounting Principles
ISBN: 978-0078110870
20th Edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
Related Video
The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.
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