Question

{Accounting Ratios} Do 2 questions each ratio.

Answer 1

Acid test ratio(liquidity ratio)and current ratio.The ratios help to measure how much current asset and liquid asset,in case of acid test ratio,is available to pay the short term debts of the firm.A good current ratio is considered 2:1 and a decent acid test ratio is considered to be 1.5:1 and 2:1.

Answer 2

Question:-

{Accounting Ratios} Do 2 questions each ratio

AnsWeR:-

There are mainly 4 different types of accounting ratios to perform a financial statement analysis; Liquidity Ratios, Solvency Ratios, Activity Ratios and Profitability Ratios.

Given:-

A current ratio below 1 means that the company doesn't have enough liquid assets to cover its short-term liabilities. A good current ratio is between 1.2 to 2, which means that the business has 2 times more current assets than liabilities to covers its debts.

We have:-

The three main categories of ratios include profitability, leverage and liquidity ratios.

Option:-

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