Evaluating Financial Statements Flashcards
1
Q
Current Ratio =
A
Current Assets / Current Liab
2
Q
Quick Ratio =
A
Current Assets - Inventory / Current Liab
3
Q
If Current Assets decrease and liabilities stay the same what happens to the Current Ratio
A
If Current Assets decrease and liabilities stay the same the current ratio decreases
4
Q
If Current Liab decrease and Current Assets stay the same what happens to the Current Ratio
A
The Current Ratio increases if Current Liabilities goes down and Current Assets stay the same
5
Q
If Current Liab increase and Current Assets stay the same what happens to the current ratio
A
The current ratio will decrease if Current Liabilities increase and current assets stay the same
