Describing Current Ratio, Debt ratio, Profit Margin and ROA
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Current ratio
Debt ratio
Profit margin
ROA
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This solution is comprised of a detailed explanation to describe Current Ratio, Debt ratio, Profit Margin and ROA.
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First, you need to understand the concept as discussed below. Then, you can find the number in the balance sheet and income statement to calculate the ratios.
Current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or short term debt within 1 year by using its short-term assets such as cash, inventory, and accounts receivable. The higher the current ratio, the more capable the company is of paying its short-term obligations. A ratio under 1 suggests that the company would ...
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