A company's financial statement reflects current assets of Php 1,250,000 and current liabilities of Php 525,000. If the previous year ratio is 1.25 what does this imply?
This change indicates that the greater the liquidity of the corporate assest, the stronger the short—term solvency, and the smaller the financial risk of the enterprise.
Answers & Comments
Answer:
1,250,000
Step-by-step explanation:
current ratio is calculated by dividing your current assets by your current liabilities
This year’s ratio is:
125000 / 52000
This change indicates that the greater the liquidity of the corporate assest, the stronger the short—term solvency, and the smaller the financial risk of the enterprise.
i liquidity ratio effect 1.