Nintendo Company, Ltd., recently reported the following financial information (amounts in millions). Compute Nintendos current ratio and
Question:
Nintendo Company, Ltd., recently reported the following financial information (amounts in millions). Compute Nintendo’s current ratio and profit margin. Round to two decimals.
Current assets.... $ 9,036 Net sales... $4,464 Total assets..... 11,477 Net income... 146 Current liabilities 871
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Financial Accounting Information For Decisions
ISBN: 9781260705584
10th Edition
Authors: John J. Wild
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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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