Determine the sales of a firm given the following information: a. Current ratio 1.4 b. Acid-test ratio 1.2 c. Current liabilities 1,600 d. Inventory turnover ratio 8
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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. A current ratio below 1 means that the company doesn't have enough liquid assets to cover its short-term liabilities.
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