What is a good current ratio

    • [DOC File]Ratio Analysis

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      Sep 06, 2009 · Generally, a current ratio of 2:1 is considered as good. Current Ratio = Total Current Asset / Total Current Liability Current ratio of XYZ organization is improving from 0.75 in year 2002 to 0.90 in year 2004.

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    • [DOC File]Financial Ratios and Quality Indicators

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      ANSWERS TO PROBLEM: (note that these are just examples of a good answer) The answer should be focused on using the current and quick ratios. While the current ratio has steadily increased, it is to be noted that the liquidity has not resulted from the most liquid assets as the CEO proposes.

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    • [DOC File]Financial Statement Analysis-Sample Midterm Exam

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      Current ratio of year 2014/15 was 8.32 which was decreased in 2015/16 to 3.33. The trend of the Bank is good since current ratio is greater than 2:1 but since it is decreasing, it seems that bank is not able to manage its current asset in compared to current liabilities.

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    • [DOC File]Current Ratio - Press Pages

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      1. The operating income/sales ratio is an example of a. a) turnover or efficiency ratio. b) coverage or liquidity ratio. c) leverage or debt ratio. d) none of the above. 2. Trends observed in historical accounting information. a) can be misleading due to changes in accounting procedures. b) can provide a basis for estimating future trends

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    • [DOC File]A NOTE ON FINANCIAL ANALYSIS - Baylor University

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      Current ratio determines the short term liquidity position of an entity. Current Assets / Current Liabilities ... However, it is commonly understood that low debt and high equity levels in the capitalization ratio indicates good quality of investment. ...

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    • What Is a Good Liquidity Ratio?

      1:1 current ratio means; the company has $1.00 in current assets to cover each $1.00 in current liabilities. Look for a current ratio above 1:1 and as close to 2:1 as possible. One problem with the current ratio is that it ignores timing of cash received and paid out.

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    • [DOC File]Calculation of Ratios:

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      1. Current Ratio-- The current ratio is the most commonly used measure of the liquidity of a company. It is simply a common sense measure. The numerator is the value of assets that should be converted into cash within the next year. The denominator is the amount of bills coming due within the next year. 2. Quick Ratio (or Acid Test Ratio)

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    • [DOC File]1

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      current ratio, to estimate a company's relative liquidity: Current ratio = (Eq. 1) Furthermore, remembering that the three primary current assets include (1) cash, (2) accounts receivable, and (3) inventories, we could make our measure of liquidity more restrictive by excluding inventories, the least liquid of the current assets, in the numerator.

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    • [DOC File]Examples of Questions on Ratio Analysis

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      The current ratio over the last three years has remained stable due to the stability of the current assets and current liabilities as a percentage of total assets. Current assets grew 1% while current liabilities grew 2% over the entire period and thus, the 1998 ratio is somewhat less than the 1996 ratio.

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    • [DOC File]COMMON RATIOS

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      Jun 28, 2009 · As a rule of thumb, it is safe to conclude that any firm with a current ratio greater than 1.0 should be able to meet its current obligations—that is, pay bills that come due in the current period. [Current ratio = (Current assets) / (Current liabilities)] c.

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