Asked by
Sierra Chaney
on Nov 12, 2024
Verified
Assuming that a company has a current ratio greater than 1.0 to 1, repaying a short-term note payable will increase the current ratio.
Acid-Test Ratio
A stringent indicator of a company's liquidity, measuring its ability to cover short-term liabilities with its most liquid assets.
- Compute and elucidate financial indices, including the current ratio, acid-test ratio, and average collection period.
Verified Answer
AC
Learning Objectives
- Compute and elucidate financial indices, including the current ratio, acid-test ratio, and average collection period.
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