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A- increase current ratio B- decrease current Ratio C - current ratio will not change D- current ratio will increase by depreciation
Current ratio (also known as Liquidity ratio & Working Capital ratio) is calculated by the following formula:
Current ratio = Current Assets / Current Liabilities
As the equation does not take fixed assets into consideration, any subsequent increase or decrease in fixed assets will have no effect of the current ratio. Therefore in this case, current ratio will not change.
C -------------------------------------------------------------------------------------------- current ratio will not change
Answer is Current ratio will not change
C) is the Correct Ans.
Not any change
......................................C current ration will not change
Answer C - current ratio will not change
Current Ratio= Current Asset / Current Liabilities
Fixed Asset doesn't include to calculate current ratio
Must clarify the rate of increase in assets to what?
The third answer is the closest rest because any increase in the proportion of out must be accompanied by the same percentage in the other party
C- current ratio will not change and fixed assets has nothing to do with current ratio. current ratio only deals with current assets and current liablities.
The Answer is, C - current ratio will not change.................
Increase in fixed assets definitely it will effect to Current Ratio though depriciation
