A entity's current ratio will be influenced by?

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1201420

2026-03-05 00:35

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By the entitys assets and liabilities. An increase in assets or a decrease in laibilities will result in a higher ratio (which good), a decrease in assets or an increase of liabilities will lower the rato. Changes in assets are things such as buying more inventory, purchasing equipment, making a sale to cash or A/R, etc. Increased liability include increasing A/P, or receiving cash from a bank loan.

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