Gomez Company had a current ratio of 2.0 in 2018 and 2.2 in 2019. Does this signify
Question:
Gomez Company had a current ratio of 2.0 in 2018 and 2.2 in 2019. Does this signify an improvement or decline in Gomez Company’s liquidity from 2018 to 2019?
Step by Step Answer:
The increase in t...View the full answer
College Accounting Chapters 1-30
ISBN: 978-1259631115
15th edition
Authors: John Price, M. David Haddock, Michael Farina
Related Video
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.
Students also viewed these Business questions
-
At the beginning of 2009, the Golden Eagle Company had a current ratio of 2 to 1. What could Golden Eagle do to increase this ratio?
-
Norsk Optronics, ALS, of Bergen, Norway, had a current ratio of 2.5 on June 30 of the current year. On that date, the companys assets were: The Norwegian currency is the krone, denoted here by the...
-
Rightway Products had a current ratio of 2.5 on June 30 of the current year. On that date, the companys assets were as follows: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $...
-
9.3.1 Which of the following statements are true concerning the mean of the differences between two dependent samples (matched pairs)? Select all that apply. A. The requirement of a simple random...
-
Dalton Company issued 5-year, 7.5% bonds with a total face value of $900,000 on January 1, 2020, for $950,000. The bonds pay interest on June 30 and December 31 of each year. Required: 1. Prepare an...
-
Business-process outsourcing (BPO) is a type of outsourcing that consists of contracting operations and responsibilities of a specific business process (e.g., human resources) to a third-party...
-
Eastman Kodak (U.S.), Fuji Film (Japan), and Agfa (Germany) all compete for a share of the world film market. Each company produces entirely in its home country and exports to a worldwide array of...
-
Consider again the choice between outsourcing and in-house assembly of HomeNet discussed in Section 8.3 and analyzed in Table 8.6. Suppose, however, that the upfront cost to set up for in-house...
-
Suppose IQ scores were obtained for 20 randomly selected sets of couples. The 20 pairs of measurements yield x 97.76, y=94.9, r=0.832, P-value = 0.000, and y = 6.86 +0.9x, where x represents the IQ...
-
The Silver Rule states, Do not do unto others what you do not want them to do unto you. Which of the five workable ethical theories is closest to the Silver Rule?
-
Why is a conceptual framework necessary in developing accounting standards and rules?
-
Give an example of an expense that is classified as Other Expense in the income statement.
-
Get project numbers for projects supplied by at least one supplier not in the same city.
-
Provide support to a colleague by Present strategies and resources for the identified areas of need for the teacher to use with the whole group, small groups, and individual students in their...
-
Operating activities resulted in EBITDA of $500,000. Depreciation for the year was $42,000. Interest paid on loans was $24,000, and principal was $20,000. Hotel has a 35% income tax rate. EBITDA...
-
In excel, data consolidation is merging or combining two or more sheets to put some or all of the data onto one sheet. This can be a convenient way to have all data on one sheet for quick analyzing...
-
1. Compare and contrast Inductive and Deductive Research. 2. Leading organizations such as Amazon and Netflix have heavily invested in big data and data analytics. Conduct research to identify a...
-
Provide a brief description of a situation where you demonstrated the core competency you selected. Indicate which stage of the competency your example demonstrates (emerging, evolving, leading,...
-
A PM system operates with a transmitter power of 10 kW and a message signal bandwidth of 10 kHz. The phase modulation constant is radians per unit input. The normalized message signal has a standard...
-
Perform the indicated operations. In designing a cam for a fire engine pump, the expression is used. Simplify this expression. (3) (3 4 32
-
The Landscape Supply Center is a retail store that sells garden equipment, furniture, and supplies. Its credit purchases and purchases returns and allowances for December are shown below. The general...
-
Simpson's Card and Novelty Shop is a retail card, novelty, and business supply store. Its credit purchases and purchases returns and allowances for February 2016 appear on the next page. The general...
-
Fashion Standards is a retail clothing store. Sales of merchandise and purchases of goods on account for January 2016, the first month of operations, appear below. INSTRUCTIONS 1. Record the...
-
Nick's Novelties, Incorporated, is considering the purchase of new electronic games to place in its amusement houses. The games would cost a total of $225,000, have a fifteen-year useful life, and...
-
6 3 Part 6 of 6 points Required information [The following information applies to the questions displayed below.] Munoz Company makes and sells products with variable costs of $24 each. Munoz incurs...
-
1. Set up the business using MYOB. 2. Create / Modify the chart of accounts. 3. Enter opening general ledger balances. 4. Set up Accounts Receivable (debtor) accounts, assign your chosen name and...
Study smarter with the SolutionInn App