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The Cash Ratio is a financial metric that measures a company's ability to cover its short-term liabilities with cash and cash equivalents alone. In 2023,
The Cash Ratio is a financial metric that measures a company's ability to cover its short-term liabilities with cash and cash equivalents alone. In 2023, Future Technology, a tech startup, has $500,000 in cash and cash equivalents and $1,000,000 in current liabilities. The Cash Ratio is calculated by dividing the total cash and cash equivalents by the total current liabilities. Future Technology's Cash Ratio is 0.5, meaning it can cover half of its current liabilities with its cash and cash equivalents alone. However, a higher ratio is generally better, and Future Technology's management should monitor this ratio closely to avoid potential liquidity problems. The ratio changed (either increased or decreased) from the year 2022 to the year 2023. Find the change in the ratio and write what causes the ratio to change
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