Please help with question on current ratio. Thanks

Business & Finance
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Should a company use current ratio?  Is so explain why in a 100 words. 

Apr 30th, 2015

The current ratio is a mainstream budgetary ratio used to test an organization's liquidity (likewise alluded to as its present or working capital position) by determining the extent of current resources accessible to cover current liabilities. The idea driving this ratio is to find out whether an organization's short term resources (money, cash counterparts, attractive securities, receivables and inventory) are promptly accessible to pay off its fleeting liabilities (notes payable, current segment of term obligation, payables, collected costs and expenses). In principle, the higher the current ratio, the better. The current ratio is used extensively in financial reporting. However, while easy to understand, it can be misleading in both a positive and negative sense - i.e., a high current ratio is not necessarily good, and a low current ratio is not necessarily bad.

http://trendshare.org/how-to-invest/what-is-the-current-ratio-and-why-does-it-matter


Apr 30th, 2015

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Apr 30th, 2015
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Apr 30th, 2015
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