Ratio indicates that its current assets exceed its


Company A has a working capital ratio of 3 to 1 and Company B 0.9 to 1. Of the following choices, which ones are true and which ones are false? Explain.

a) Company A's ratio suggests it may not be able to fulfill its obligations when due

b) Company B's ratio indicates that its current assets exceed its long-term liabilities

c) Restructuring Company B's revolving line of credit (due upon bank's demand) to a long-term loan will improve its working capital ratio.

Request for Solution File

Ask an Expert for Answer!!
Financial Accounting: Ratio indicates that its current assets exceed its
Reference No:- TGS01251341

Expected delivery within 24 Hours