Piaggio (www.Piaggio.com) manufactures two-, three- and four-wheel vehicles, and is Europes leading manufacturer of motorcycles and scooters.
Question:
Required
1. Compute Piaggios 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 currentratio.
(Euro thousands) CurrentYear Prior Year 509,708 644,277 575,897 616,166 Current liabilities.
Step by Step Answer:
1 Current ratio in thousands Euro Current year 509708 ...View the full answer
Fundamental accounting principle
ISBN: 978-0078025587
21st 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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