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Refer to Question 19. What other ratio(s) of Unlimited Enterprises might you review to determine whether or

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Refer to Question 19. What other ratio(s) of Unlimited Enterprises might you review to determine whether or not the increase in the current ratio represents an improvement in the company's financial health?
In Question 19
The president of Unlimited Enterprises proudly announces that her company's liquidity has improved. Its current ratio increased substantially this year. Does an increase in the current ratio always indicate improved liquidity?
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The current ratio is a financial ratio that measures a company\'s ability to pay its short-term obligations with its short-term assets. It is calculated by dividing a company\'s current assets by its current liabilities. The formula for calculating the current ratio is: Current Ratio = Current Assets / Current Liabilities Current assets are assets that can be converted to cash within one year, while current liabilities are debts that are due within one year. A current ratio of 1:1 or greater is generally considered good, as it indicates that a company has enough current assets to cover its current liabilities. A current ratio of less than 1:1 may suggest that a company may have difficulty meeting its short-term obligations. It\'s important to note that the current ratio is just one of many financial ratios that can be used to assess a company\'s financial health. It should be used in conjunction with other financial ratios and qualitative factors to make informed decisions about investing or lending to a company.

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