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Current Ratio vs. Total Assets Turnover Ratio

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Over the past year, K corporation has realized an increase in its current ratio and a drop in its total assets turnover ratio. However, the company's sales, quick ratio, and fixed assets turnover ratio have remained constant. What explains these changes? Could you share some of your ideas and opinions with us?

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Solution Summary

Current ratio and total assets turnover ratio are discussed.

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CURRENT RATIO= CURRENT ASSETS/CURRENT LIABILITIES
Liquid ratio = Liquid assets/Current Liabilities
Total Asset Turnover = Sales/Total Assets
Fixed ...

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