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Current and Other Ratios

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What financial information does the current ratio measure?

How does the current ratio relate to the other liquidity ratios?

Which financial ratios would you use - and how - to determine whether a company will be able to meet its commercial bank loan payments?

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Solution Summary

The response explains the benefits of current ratio and other ratios in 211 words with references.

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What financial information does the current ratio measure? How does the current ratio relate to the other liquidity ratios?

Current ratio measures the liquidity position of the organization. It indicates the ability to pay the short term obligations of the organization. It is computed by Current Assets/Current Liabilities.

The other prominent liquidity ratio is quick ratio which ...

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