Explore BrainMass

Explore BrainMass

    Description of Current Ratio

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The current ratio in the company, for which you are a financial analyst, is 3 to 1. The average for other firms in the industry is 1.6 to 1. Management has asked you to evaluate the company's ratio, and explain why it is nearly twice the industry's average. What factors are responsible for the difference? Are we better off than our competitors, or worse?

    © BrainMass Inc. brainmass.com March 4, 2021, 9:56 pm ad1c9bdddf
    https://brainmass.com/business/financial-ratios/description-current-ratio-284152

    Solution Preview

    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

    If the current ratio is ...

    Solution Summary

    The response discusses current ratio as a way to tell if a company is better off than its competitors in 135 words with 1 reference.

    $2.49

    ADVERTISEMENT