FREE Trial

Refer to Question 19. What other ratio(s) of Unlimited Enterprises might you review to determine whether or

Question:

Refer to Question 19. What other ratio(s) of Unlimited Enterprises might you review to determine whether or not the increase in the current ratio represents an improvement in the company's financial health?
In Question 19
The president of Unlimited Enterprises proudly announces that her company's liquidity has improved. Its current ratio increased substantially this year. Does an increase in the current ratio always indicate improved liquidity?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 63% (11 reviews)

According to my opinion in order to determine if th...View the full answer


answer-question-section
Answered By
tutor-profile-image
Arshad Ahmad
Well, I am really new to tutoring but I truly believe a good student can be a better teacher. I have always been a topper at school. I passed my Chartered Accountancy at a very young age of 23, a rare feat for most of the students. I am really dedicated to whatever work I do and I am very strict regarding deadlines. i am always committed and dedicated to whatever work allotted to me and I make sure it is completed well within deadline and also I try to give my best in whatever I do. Hope we will have a good time studying together.
5.00+ 1+ Reviews 10+ Question Solved
Related Book For  book-img-for-question
Accounting Principles

Accounting Principles

ISBN: 978-1119048503

7th Canadian Edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

Question Posted:
See More Questions

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.

Students also viewed these Managerial Accounting questions

Science Of Learning Mathematical Proofs The An Introductory Course 1st Edition - ISBN: 9811225516 - Free Book