Financial Management
Submitted by baybdva97 on October 22, 2011
- Category: Business
- Words: 1460
- Pages: 6
- Views: 61
- Popularity Rank: 4247
Financial Management
A company’s current ratio compares current assets to current liabilities, giving executives giving executives information about their ability to pay its current debts as they come due (Kurtz, 2010). Current assets are cash and any assets expected to be converted into cash within the next year. This ratio illustrates a company's ability to remain solvent. Generally investors look for a company with a current ratio of 2:1 which means that it has twice as many current assets as current liabilities. A company with a current ratio that is less than one indicates that the company may have problems meeting short-term financial obligations. On the other hand, if the ratio is too high, the...
You must Login to view the entire paper.
If you are not a member yet, Sign Up for free!