SlideShare a Scribd company logo
1) How is the current ratio calculated?
2) How does a classified balance sheet help this calculation?
3) How is it used to evaluate a company?
4) Give an example of a good current ratio and a bad current ratio.
Solution
1. Current ratio = Current assets ÷ Current liabilities
2. A classified balance sheet will have 4 sections, current assets, noncurrent assets, current
liabilities and noncurrent liabilities. It is easier to obtain the values of current assets and current
liabilities from this balance sheet.
3. It is used to evaluate the liquidity of the company and represents company’s ability to pay
current liabilities.
4. If the current ratio is more than 1, company has enough liquidity and vice-versa.
Current assets = 15 million and current liabilities = 10 million
Good current ratio = 1.5
Current assets = 15 million and current liabilities = 30 million
Bad current ratio = 0.5
1) How is the current ratio calculated- 2) How does a classified balan.docx

More Related Content

Similar to 1) How is the current ratio calculated- 2) How does a classified balan.docx

When reviewing a balance sheet of a corporation- what are things or it.docx
When reviewing a balance sheet of a corporation- what are things or it.docxWhen reviewing a balance sheet of a corporation- what are things or it.docx
When reviewing a balance sheet of a corporation- what are things or it.docx
jbarbara1
 
Bca i fma u 3 ratio analysis
Bca i fma u 3 ratio analysisBca i fma u 3 ratio analysis
Bca i fma u 3 ratio analysis
Rai University
 
Liquidity ratios.ppt
Liquidity ratios.pptLiquidity ratios.ppt
Liquidity ratios.ppt
ShilpaNarang7
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
Yamini Kahaliya
 
Financial Ratios: What The Financial Statements
Financial Ratios: What The Financial StatementsFinancial Ratios: What The Financial Statements
Financial Ratios: What The Financial Statements
How To Be A Stock Market Player
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
Dr Yogita Wagh
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
Dr Yogita Wagh
 
Financial management
Financial managementFinancial management
Financial managementDharmik
 
Educ.jmu.edu ~drakepp principles_module2_fin_rat
Educ.jmu.edu ~drakepp principles_module2_fin_ratEduc.jmu.edu ~drakepp principles_module2_fin_rat
Educ.jmu.edu ~drakepp principles_module2_fin_rat
Pinky Aggarwal
 
Ratio analysis of square pharma
Ratio analysis of square pharmaRatio analysis of square pharma
Ratio analysis of square pharma
Enamul Islam
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
yerramaddudevendrare
 
02 FM CHAPTER-2.pptx
02 FM CHAPTER-2.pptx02 FM CHAPTER-2.pptx
02 FM CHAPTER-2.pptx
EbsaAbdi1
 
RATIO ANALYSIS in management accounting of companies
RATIO ANALYSIS in management accounting of companiesRATIO ANALYSIS in management accounting of companies
RATIO ANALYSIS in management accounting of companies
kamikazekujoh
 
Analysis & interpretation of fs
Analysis & interpretation of fsAnalysis & interpretation of fs
Analysis & interpretation of fsAdil Shaikh
 
Company analysis
Company analysisCompany analysis
Company analysis
Shaik Mohammad Imran
 
Steps to basic_company_financial_analysis
Steps to basic_company_financial_analysisSteps to basic_company_financial_analysis
Steps to basic_company_financial_analysis
Ibrahim Hussain
 
Analysis
AnalysisAnalysis
Analysis
noorisingh
 
3 Evaluation methods for working with financial statements.The f.docx
3 Evaluation methods for working with financial statements.The f.docx3 Evaluation methods for working with financial statements.The f.docx
3 Evaluation methods for working with financial statements.The f.docx
tamicawaysmith
 
18 ratio analysis_theory
18 ratio analysis_theory18 ratio analysis_theory
18 ratio analysis_theory
rushank1
 

Similar to 1) How is the current ratio calculated- 2) How does a classified balan.docx (20)

When reviewing a balance sheet of a corporation- what are things or it.docx
When reviewing a balance sheet of a corporation- what are things or it.docxWhen reviewing a balance sheet of a corporation- what are things or it.docx
When reviewing a balance sheet of a corporation- what are things or it.docx
 
Bca i fma u 3 ratio analysis
Bca i fma u 3 ratio analysisBca i fma u 3 ratio analysis
Bca i fma u 3 ratio analysis
 
Liquidity ratios.ppt
Liquidity ratios.pptLiquidity ratios.ppt
Liquidity ratios.ppt
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
 
Financial Ratios: What The Financial Statements
Financial Ratios: What The Financial StatementsFinancial Ratios: What The Financial Statements
Financial Ratios: What The Financial Statements
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
 
Financial management
Financial managementFinancial management
Financial management
 
Educ.jmu.edu ~drakepp principles_module2_fin_rat
Educ.jmu.edu ~drakepp principles_module2_fin_ratEduc.jmu.edu ~drakepp principles_module2_fin_rat
Educ.jmu.edu ~drakepp principles_module2_fin_rat
 
Ratio
RatioRatio
Ratio
 
Ratio analysis of square pharma
Ratio analysis of square pharmaRatio analysis of square pharma
Ratio analysis of square pharma
 
Ratio analysis
Ratio analysisRatio analysis
Ratio analysis
 
02 FM CHAPTER-2.pptx
02 FM CHAPTER-2.pptx02 FM CHAPTER-2.pptx
02 FM CHAPTER-2.pptx
 
RATIO ANALYSIS in management accounting of companies
RATIO ANALYSIS in management accounting of companiesRATIO ANALYSIS in management accounting of companies
RATIO ANALYSIS in management accounting of companies
 
Analysis & interpretation of fs
Analysis & interpretation of fsAnalysis & interpretation of fs
Analysis & interpretation of fs
 
Company analysis
Company analysisCompany analysis
Company analysis
 
Steps to basic_company_financial_analysis
Steps to basic_company_financial_analysisSteps to basic_company_financial_analysis
Steps to basic_company_financial_analysis
 
Analysis
AnalysisAnalysis
Analysis
 
3 Evaluation methods for working with financial statements.The f.docx
3 Evaluation methods for working with financial statements.The f.docx3 Evaluation methods for working with financial statements.The f.docx
3 Evaluation methods for working with financial statements.The f.docx
 
18 ratio analysis_theory
18 ratio analysis_theory18 ratio analysis_theory
18 ratio analysis_theory
 

More from rjessie

7- (6) Describe the interference pattern produced by light going throu.docx
7- (6) Describe the interference pattern produced by light going throu.docx7- (6) Describe the interference pattern produced by light going throu.docx
7- (6) Describe the interference pattern produced by light going throu.docx
rjessie
 
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
rjessie
 
802-11 networks are identified by which of the following- A- Security.docx
802-11 networks are identified by which of the following- A- Security.docx802-11 networks are identified by which of the following- A- Security.docx
802-11 networks are identified by which of the following- A- Security.docx
rjessie
 
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
rjessie
 
8- Multiprocessing with a single core processor is ________________- 9.docx
8- Multiprocessing with a single core processor is ________________- 9.docx8- Multiprocessing with a single core processor is ________________- 9.docx
8- Multiprocessing with a single core processor is ________________- 9.docx
rjessie
 
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
rjessie
 
8- How will doubling the concentration of H20 in the following reactio.docx
8- How will doubling the concentration of H20 in the following reactio.docx8- How will doubling the concentration of H20 in the following reactio.docx
8- How will doubling the concentration of H20 in the following reactio.docx
rjessie
 
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
rjessie
 
6- Because most reps access the TAL Distributors database from their m.docx
6- Because most reps access the TAL Distributors database from their m.docx6- Because most reps access the TAL Distributors database from their m.docx
6- Because most reps access the TAL Distributors database from their m.docx
rjessie
 
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
rjessie
 
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
rjessie
 
7- Write a mass action expression for the reaction between marble (CaC.docx
7- Write a mass action expression for the reaction between marble (CaC.docx7- Write a mass action expression for the reaction between marble (CaC.docx
7- Write a mass action expression for the reaction between marble (CaC.docx
rjessie
 
7- Flow and stock variables Identify whether each of the following is (1).docx
7- Flow and stock variables Identify whether each of the following is (1).docx7- Flow and stock variables Identify whether each of the following is (1).docx
7- Flow and stock variables Identify whether each of the following is (1).docx
rjessie
 
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
rjessie
 
7- Flow and stock variables Identify whether each of the following is.docx
7- Flow and stock variables Identify whether each of the following is.docx7- Flow and stock variables Identify whether each of the following is.docx
7- Flow and stock variables Identify whether each of the following is.docx
rjessie
 
1)- The total number of ions present in iron (II) carbonate is -- 2)-.docx
1)- The total number of ions present in iron (II) carbonate is --  2)-.docx1)- The total number of ions present in iron (II) carbonate is --  2)-.docx
1)- The total number of ions present in iron (II) carbonate is -- 2)-.docx
rjessie
 
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
rjessie
 
1) The rodent population in a city is currently estimated at 30-000- I.docx
1) The rodent population in a city is currently estimated at 30-000- I.docx1) The rodent population in a city is currently estimated at 30-000- I.docx
1) The rodent population in a city is currently estimated at 30-000- I.docx
rjessie
 
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
rjessie
 
1) compare and contrast the properties of the terrestrial planets and.docx
1) compare and contrast the properties of the terrestrial planets and.docx1) compare and contrast the properties of the terrestrial planets and.docx
1) compare and contrast the properties of the terrestrial planets and.docx
rjessie
 

More from rjessie (20)

7- (6) Describe the interference pattern produced by light going throu.docx
7- (6) Describe the interference pattern produced by light going throu.docx7- (6) Describe the interference pattern produced by light going throu.docx
7- (6) Describe the interference pattern produced by light going throu.docx
 
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
6-14-2018 1159 PM 60-2-100 Gradeboo -Print Calculator Periodic Table Q.docx
 
802-11 networks are identified by which of the following- A- Security.docx
802-11 networks are identified by which of the following- A- Security.docx802-11 networks are identified by which of the following- A- Security.docx
802-11 networks are identified by which of the following- A- Security.docx
 
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
8- Super Mario is attempting to high jump from a pipe on to a set of b.docx
 
8- Multiprocessing with a single core processor is ________________- 9.docx
8- Multiprocessing with a single core processor is ________________- 9.docx8- Multiprocessing with a single core processor is ________________- 9.docx
8- Multiprocessing with a single core processor is ________________- 9.docx
 
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
8- Identily cach of the following as a strong acid- a weak acid- a bas.docx
 
8- How will doubling the concentration of H20 in the following reactio.docx
8- How will doubling the concentration of H20 in the following reactio.docx8- How will doubling the concentration of H20 in the following reactio.docx
8- How will doubling the concentration of H20 in the following reactio.docx
 
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
73- On January 1- 2010- Lynn Company borrows $2-000-000 from National.docx
 
6- Because most reps access the TAL Distributors database from their m.docx
6- Because most reps access the TAL Distributors database from their m.docx6- Because most reps access the TAL Distributors database from their m.docx
6- Because most reps access the TAL Distributors database from their m.docx
 
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
6- An airplane flies 450 km from Raleigh to Washington DC at 500 km-hr.docx
 
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
6- A 25-kg ball with a radius of 10 cm is submerged held halfway down.docx
 
7- Write a mass action expression for the reaction between marble (CaC.docx
7- Write a mass action expression for the reaction between marble (CaC.docx7- Write a mass action expression for the reaction between marble (CaC.docx
7- Write a mass action expression for the reaction between marble (CaC.docx
 
7- Flow and stock variables Identify whether each of the following is (1).docx
7- Flow and stock variables Identify whether each of the following is (1).docx7- Flow and stock variables Identify whether each of the following is (1).docx
7- Flow and stock variables Identify whether each of the following is (1).docx
 
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
7- Heat is (a) a fluid called caloric- (b) a measure of the average ki.docx
 
7- Flow and stock variables Identify whether each of the following is.docx
7- Flow and stock variables Identify whether each of the following is.docx7- Flow and stock variables Identify whether each of the following is.docx
7- Flow and stock variables Identify whether each of the following is.docx
 
1)- The total number of ions present in iron (II) carbonate is -- 2)-.docx
1)- The total number of ions present in iron (II) carbonate is --  2)-.docx1)- The total number of ions present in iron (II) carbonate is --  2)-.docx
1)- The total number of ions present in iron (II) carbonate is -- 2)-.docx
 
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
1) Which of the following can behave as Bronsted-Lowry bases in aqueou.docx
 
1) The rodent population in a city is currently estimated at 30-000- I.docx
1) The rodent population in a city is currently estimated at 30-000- I.docx1) The rodent population in a city is currently estimated at 30-000- I.docx
1) The rodent population in a city is currently estimated at 30-000- I.docx
 
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
1) describe the conditions neccesary for a lunar eclipse to occur- and.docx
 
1) compare and contrast the properties of the terrestrial planets and.docx
1) compare and contrast the properties of the terrestrial planets and.docx1) compare and contrast the properties of the terrestrial planets and.docx
1) compare and contrast the properties of the terrestrial planets and.docx
 

Recently uploaded

Executive Directors Chat Leveraging AI for Diversity, Equity, and Inclusion
Executive Directors Chat  Leveraging AI for Diversity, Equity, and InclusionExecutive Directors Chat  Leveraging AI for Diversity, Equity, and Inclusion
Executive Directors Chat Leveraging AI for Diversity, Equity, and Inclusion
TechSoup
 
Chapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptxChapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptx
Mohd Adib Abd Muin, Senior Lecturer at Universiti Utara Malaysia
 
Biological Screening of Herbal Drugs in detailed.
Biological Screening of Herbal Drugs in detailed.Biological Screening of Herbal Drugs in detailed.
Biological Screening of Herbal Drugs in detailed.
Ashokrao Mane college of Pharmacy Peth-Vadgaon
 
A Survey of Techniques for Maximizing LLM Performance.pptx
A Survey of Techniques for Maximizing LLM Performance.pptxA Survey of Techniques for Maximizing LLM Performance.pptx
A Survey of Techniques for Maximizing LLM Performance.pptx
thanhdowork
 
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptxChapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Mohd Adib Abd Muin, Senior Lecturer at Universiti Utara Malaysia
 
The Challenger.pdf DNHS Official Publication
The Challenger.pdf DNHS Official PublicationThe Challenger.pdf DNHS Official Publication
The Challenger.pdf DNHS Official Publication
Delapenabediema
 
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBCSTRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
kimdan468
 
Overview on Edible Vaccine: Pros & Cons with Mechanism
Overview on Edible Vaccine: Pros & Cons with MechanismOverview on Edible Vaccine: Pros & Cons with Mechanism
Overview on Edible Vaccine: Pros & Cons with Mechanism
DeeptiGupta154
 
A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
Peter Windle
 
Supporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptxSupporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptx
Jisc
 
Digital Artifact 2 - Investigating Pavilion Designs
Digital Artifact 2 - Investigating Pavilion DesignsDigital Artifact 2 - Investigating Pavilion Designs
Digital Artifact 2 - Investigating Pavilion Designs
chanes7
 
Synthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptxSynthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptx
Pavel ( NSTU)
 
Pride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School DistrictPride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School District
David Douglas School District
 
The Diamond Necklace by Guy De Maupassant.pptx
The Diamond Necklace by Guy De Maupassant.pptxThe Diamond Necklace by Guy De Maupassant.pptx
The Diamond Necklace by Guy De Maupassant.pptx
DhatriParmar
 
How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...
Jisc
 
Normal Labour/ Stages of Labour/ Mechanism of Labour
Normal Labour/ Stages of Labour/ Mechanism of LabourNormal Labour/ Stages of Labour/ Mechanism of Labour
Normal Labour/ Stages of Labour/ Mechanism of Labour
Wasim Ak
 
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
Nguyen Thanh Tu Collection
 
Acetabularia Information For Class 9 .docx
Acetabularia Information For Class 9  .docxAcetabularia Information For Class 9  .docx
Acetabularia Information For Class 9 .docx
vaibhavrinwa19
 
special B.ed 2nd year old paper_20240531.pdf
special B.ed 2nd year old paper_20240531.pdfspecial B.ed 2nd year old paper_20240531.pdf
special B.ed 2nd year old paper_20240531.pdf
Special education needs
 
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Dr. Vinod Kumar Kanvaria
 

Recently uploaded (20)

Executive Directors Chat Leveraging AI for Diversity, Equity, and Inclusion
Executive Directors Chat  Leveraging AI for Diversity, Equity, and InclusionExecutive Directors Chat  Leveraging AI for Diversity, Equity, and Inclusion
Executive Directors Chat Leveraging AI for Diversity, Equity, and Inclusion
 
Chapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptxChapter 3 - Islamic Banking Products and Services.pptx
Chapter 3 - Islamic Banking Products and Services.pptx
 
Biological Screening of Herbal Drugs in detailed.
Biological Screening of Herbal Drugs in detailed.Biological Screening of Herbal Drugs in detailed.
Biological Screening of Herbal Drugs in detailed.
 
A Survey of Techniques for Maximizing LLM Performance.pptx
A Survey of Techniques for Maximizing LLM Performance.pptxA Survey of Techniques for Maximizing LLM Performance.pptx
A Survey of Techniques for Maximizing LLM Performance.pptx
 
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptxChapter 4 - Islamic Financial Institutions in Malaysia.pptx
Chapter 4 - Islamic Financial Institutions in Malaysia.pptx
 
The Challenger.pdf DNHS Official Publication
The Challenger.pdf DNHS Official PublicationThe Challenger.pdf DNHS Official Publication
The Challenger.pdf DNHS Official Publication
 
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBCSTRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
STRAND 3 HYGIENIC PRACTICES.pptx GRADE 7 CBC
 
Overview on Edible Vaccine: Pros & Cons with Mechanism
Overview on Edible Vaccine: Pros & Cons with MechanismOverview on Edible Vaccine: Pros & Cons with Mechanism
Overview on Edible Vaccine: Pros & Cons with Mechanism
 
A Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in EducationA Strategic Approach: GenAI in Education
A Strategic Approach: GenAI in Education
 
Supporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptxSupporting (UKRI) OA monographs at Salford.pptx
Supporting (UKRI) OA monographs at Salford.pptx
 
Digital Artifact 2 - Investigating Pavilion Designs
Digital Artifact 2 - Investigating Pavilion DesignsDigital Artifact 2 - Investigating Pavilion Designs
Digital Artifact 2 - Investigating Pavilion Designs
 
Synthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptxSynthetic Fiber Construction in lab .pptx
Synthetic Fiber Construction in lab .pptx
 
Pride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School DistrictPride Month Slides 2024 David Douglas School District
Pride Month Slides 2024 David Douglas School District
 
The Diamond Necklace by Guy De Maupassant.pptx
The Diamond Necklace by Guy De Maupassant.pptxThe Diamond Necklace by Guy De Maupassant.pptx
The Diamond Necklace by Guy De Maupassant.pptx
 
How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...How libraries can support authors with open access requirements for UKRI fund...
How libraries can support authors with open access requirements for UKRI fund...
 
Normal Labour/ Stages of Labour/ Mechanism of Labour
Normal Labour/ Stages of Labour/ Mechanism of LabourNormal Labour/ Stages of Labour/ Mechanism of Labour
Normal Labour/ Stages of Labour/ Mechanism of Labour
 
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
BÀI TẬP BỔ TRỢ TIẾNG ANH GLOBAL SUCCESS LỚP 3 - CẢ NĂM (CÓ FILE NGHE VÀ ĐÁP Á...
 
Acetabularia Information For Class 9 .docx
Acetabularia Information For Class 9  .docxAcetabularia Information For Class 9  .docx
Acetabularia Information For Class 9 .docx
 
special B.ed 2nd year old paper_20240531.pdf
special B.ed 2nd year old paper_20240531.pdfspecial B.ed 2nd year old paper_20240531.pdf
special B.ed 2nd year old paper_20240531.pdf
 
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...
 

1) How is the current ratio calculated- 2) How does a classified balan.docx

  • 1. 1) How is the current ratio calculated? 2) How does a classified balance sheet help this calculation? 3) How is it used to evaluate a company? 4) Give an example of a good current ratio and a bad current ratio. Solution 1. Current ratio = Current assets ÷ Current liabilities 2. A classified balance sheet will have 4 sections, current assets, noncurrent assets, current liabilities and noncurrent liabilities. It is easier to obtain the values of current assets and current liabilities from this balance sheet. 3. It is used to evaluate the liquidity of the company and represents company’s ability to pay current liabilities. 4. If the current ratio is more than 1, company has enough liquidity and vice-versa. Current assets = 15 million and current liabilities = 10 million Good current ratio = 1.5 Current assets = 15 million and current liabilities = 30 million Bad current ratio = 0.5