BUISENESS MANAGEMENT
FINANCIAL MANAGEMENT
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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$2, 500, 000
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$1, 300, 000
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$2, 000, 000
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$1, 800, 000
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Detailed explanation-1: -Current Ratio-A firm’s total current assets are divided by its total current liabilities. It shows the ability of a firm to meets its current liabilities with current assets. Quick Ratio-A firm’s cash or near cash current assets divided by its total current liabilities.
Detailed explanation-2: -Now let us increase the current assets and current liabilities by Rs. 100000 and calculate the new current ratio; Current ratio = 300000/200000 = 1.5:1.
Detailed explanation-3: -The calculation for the current liabilities formula is relatively simple. It is a summation of all the current liabilities of the company. The current liabilities are notes payable, accounts payable, accrued expenses, unearned revenue, current portion of long-term debt, and other short-term debt.