What does it mean when you have a 3:1 current ratio? Explain

Expert Solution

A 3:1 current ratio explains that the company's ability to pay its short term liabilities is 3 times.

Current ratio = Current Asset / Current liability

Current Asset = 3 x Current liability

This means that the firm's short term assets are three times the short term liabilities of the firm. This ratio is very healthy for a firm because it signifies the investors that the firm is very well able to pay its current debt and payables.

keosha answered 2 years ago

What does it mean in terms of variability when the F ratio is equal to 1?...

What does it mean in terms of variability when the F ratio is equal to 1? Why—explain in terms of variance or differences.

1. When Aristotle writes that moral virtue is a "mean", what does he mean? Have you...

1. When Aristotle writes that moral virtue is a "mean", what does he mean? Have you ever used such a model to solve a personal dilemma? 2. Don't we all strive for moral virtue? What would Aristotle think of society today? What would he say we did wrong?

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what information this ratio provides (define), and what the results mean specifically to your company. Use complete sentences in your own words. Has the current ratio improved?_________________________ 2) Company's Debt ratio 2017 Debt Ratio =0.417987 = 41.799% 2016 Debit Ratio = 0.415240 = 41.524% Explain what information this ratio provides (define), and what the results mean specifically to your company Use complete sentences Has the...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what information this ratio provides (define), and what the results mean specifically to your company. Use complete sentences in your own words. Has the current ratio improved?_________________________ 2) Company's Debt ratio 2017 Debt Ratio =0.417987 = 41.799% 2016 Debit Ratio = 0.415240 = 41.524% Explain what information this ratio provides (define), and what the results mean specifically to your company Use complete sentences Has the...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what information this ratio provides (define), and what the results mean specifically to your company. Use complete sentences in your own words. Has the current ratio improved?_________________________ 2) Company's Debt ratio 2017 Debt Ratio =0.417987 = 41.799% 2016 Debit Ratio = 0.415240 = 41.524% Explain what information this ratio provides (define), and what the results mean specifically to your company Use complete sentences Has the...

What is the current ratio? What is its purpose? How does this ratio measure liquidity? Explain...

What is the current ratio? What is its purpose? How does this ratio measure liquidity? Explain how the current ratio can be easily manipulated, providing a detailed illustration and example of how it can be manipulated.

What does it mean when 2 dashes (--) are indicated as an efficiency ratio, is it...

What does it mean when 2 dashes (--) are indicated as an efficiency ratio, is it that it is 0 or close to it or that the data was unavailable? I have to compare two company's.

You Explain it: What is a residual? What does it mean when a residual is positive?...

You Explain it: What is a residual? What does it mean when a residual is positive? Explain the phrase outside the scope of the model. Why is it dangerous to make predictions outside the scope of the model? Explain what each point on the least-squares regression line represents.

1. What does diffraction mean? 2. When does diffraction occur? 3. When looking at an interference...

1. What does diffraction mean? 2. When does diffraction occur? 3. When looking at an interference or diffraction pattern, what does an anti-node look like? 4. When looking at an interference or diffraction pattern, what does a node look like? 5. What safety precautions are important to keep in mind while you're using a laser pointer?

What does it mean to have a benefit-cost ratio greater than 1 (one)? A. It means...

What does it mean to have a benefit-cost ratio greater than 1 (one)? A. It means that the policy is too costly in comparison to the benefits B. It means that present value of benefits is greater than present value of costs C. It means that present value of costs is greater than present value of benefits D. It means that the policy is inefficient You have to recommend one alternative from two or more alternatives. If your recommendation has...

Question

What does it mean when you have a 3:1 current ratio? Explain

Solutions

Expert Solution

Related Solutions

What does it mean in terms of variability when the F ratio is equal to 1?...

1. When Aristotle writes that moral virtue is a "mean", what does he mean? Have you...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

1) Company's Current ratio 2017 Current ratio = 2.055 2016 Current ratio = 2.077 Explain what...

What is the current ratio? What is its purpose? How does this ratio measure liquidity? Explain...

What does it mean when 2 dashes (--) are indicated as an efficiency ratio, is it...

You Explain it: What is a residual? What does it mean when a residual is positive?...

1. What does diffraction mean? 2. When does diffraction occur? 3. When looking at an interference...

What does it mean to have a benefit-cost ratio greater than 1 (one)? A. It means...