Practice Liquidity Ratios - 19.2.1 | 19. Financial Statement Analysis – Ratio Analysis | Management 1 (Organizational Behaviour/Finance & Accounting)
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19.2.1 - Liquidity Ratios

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Learning

Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

Calculate the current ratio if a company has $150,000 in current assets and $75,000 in current liabilities.

💡 Hint: Use the formula Current Assets / Current Liabilities.

Question 2

Easy

What is a healthy current ratio for most companies?

💡 Hint: Think of the common guideline for adequate liquidity.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the formula for calculating the Current Ratio?

💡 Hint: Remember the structure that highlights a firm's immediate financial health.

Question 2

True or False: A Quick Ratio of 0.5 indicates that a company can cover its short-term liabilities.

💡 Hint: Think of what a ratio below 1 signifies in the context of liquidity.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A tech company has a current ratio of 1.2 and wants to improve its liquidity. They decide to reduce some liabilities by $50,000 and increase current assets by $100,000. What will the new current ratio be?

💡 Hint: Use the formula to calculate the new ratio based on the changes made.

Question 2

Discuss the potential impact on the stock price of a tech startup if it reports a current ratio of below 1 in its quarterly earnings report.

💡 Hint: Consider how markets react to perceived financial health.

Challenge and get performance evaluation