Question: Norman Corporation has a current ratio of 1 1 Tim has
Norman Corporation has a current ratio of 1.1. Tim has always been told that a corporation’s current ratio should exceed 2.0. The company maintains that its ratio is low because it has a minimal amount of inventory on hand so as to reduce operating costs. Norman also has significant available lines of credit. Is Tim still correct? What do some companies do to compensate for having fewer liquid assets?
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