Fixed asset help to find out current ratio. True or False?
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No current asset is helps
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Fixed asset help to find out current ratio is false.
Explanation:
As we know that
The current ratio shows a relationship between the current assets and the current liabilities.
In mathematically,
Current ratio = Total Current assets ÷ total current liabilities
This ratio measures the liquidity of the company.
While the fixed asset is the long term asset whose life is more than one year. It includes plant, machinery, furniture & fixtures, land & building, etc
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