The ratio is the ratio of current assets to current liabilities, whereas the ratio is the ratio of cash, accounts receivable, and marketable securities to current liabilities.
Question
The ratio is the ratio of current assets to current liabilities, whereas the ratio is the ratio of cash, accounts receivable, and marketable securities to current liabilities.
Solution
It seems like you're asking about two different financial ratios, but you didn't specify which ones. However, based on your description, it sounds like you're referring to the Current Ratio and the Quick Ratio.
- The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It is calculated by dividing current assets by current liabilities. Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets. Current liabilities include short-term debt, dividends payable, trade liabilities, and other
Similar Questions
The current ratio is calculated by dividing:a.Current assets by current liabilitiesb.Current liabilities by current assetsc.Total assets by total liabilitiesd.Total liabilities by total assets
Debt ratio is the ratio of
Current assets divided by current liabilities is the:Multiple ChoiceCurrent ratio.Quick ratio.Debt ratio.Liquidity ratio.Solvency ratio.
The current ratio is:Question 3Answera.calculated by subtracting current liabilities from current assetsb.calculated by dividing current liabilities by current assetsc.used to evaluate a company's solvency and long-term debt paying abilityd.used to evaluate a company's liquidity and short-term debt paying ability
ratios measure a company's ability to turn assets into cash to pay its short-term debt.
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