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If a company has 88% of current Ratio it should be:

A- invest part of cash in short term investment B- try to attain more short term resources C- this ratio mean that current assets equal current liabilities D- all answers are false

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Question ajoutée par Ahmed kandil , Cost Controller , Battour Holding Cpompany
Date de publication: 2015/04/06
shahzad Bashir
par shahzad Bashir , Account Manager , Al Mabrook General Land Transport L.L.C

D- All answers are false 

Because Current ratio always in time not in percentage.

Muhammad Kashif Safdar
par Muhammad Kashif Safdar , Group Accounts Manager , Eden Global Investments Ltd.

A-invest part of cash in short term investment The Current ratio is measure a business ability to pay its short-term and Long-term Debt. It’s not a %. Shows result in times. Greater than one (>1) means company has enough sources for pay their debts and has a good cash position.

If it’s more than2 or near it means company tie up their too much cash in Assets. Which would be value less? It’s should be invest in others project or in short-term investment.

 

Ayman Esa Mustafa Farrag
par Ayman Esa Mustafa Farrag , مدير مالي , شركة الصفوف

The Current Ratio formula is:

Current Ratio

It is not a percentage , but less than1 or above1 If less than one means that the assets do not cover liabilities, there is a risk . If the top of the opposite

Syed Zargham Haider Rizvi
par Syed Zargham Haider Rizvi , Articled Assistant , Mittal Gupta and Company

88% Current ratio states the ratio to be 0.88:1 ie. for for every 1 unit of current liability to pay, the company has only 0.88 unit of its current assets.This shows that the company is not in a good state of being solvent. Current ratio should be of 2:1 (or 200%). 88% current ratio reflects bad image of company regarding its sovency.

Mohd aquib Omair
par Mohd aquib Omair , Head Of Finance , YIACO Medical Company K.S.C.P

A- invest part of cash in short term investment

Ahmed Salah
par Ahmed Salah , Chief Accountant , Hassan Acc.

this percentage  suggests that the company in question would be unable to pay off its obligations if they came due at that point. While a current ratio below 1 shows that the company is not in good financial health

Mohamed shata
par Mohamed shata , Accounting Manager , Masar Alomran for Concrete Products

current asset is important ratio its measure the ability of the firm to meet current obligatioms the result of current ratio should be more than 1 so that  the firm does not fall in financia diffculty 

Jurgen Hecht
par Jurgen Hecht , CFO , Alexander Forbes

Means that current assets are not sufficient to pay for its current liabilities - not a good sign 

marian aziz
par marian aziz , cost accountant , mt catheters technology

B- try to attain more short termresources                                                           cr ratio = cr assetes/ cr debts, sice it s less than 1 so cr debts are more than cr assetes

Utilisateur supprimé
par Utilisateur supprimé

Current ratio is a ratio and not a percentage. The intrepretation of the ratio might depend on the industry since the normal value for each industry may vary. Normally, it should be above1. Since, it indicates the company's position to pay off the debts using its current assets.

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