Determine the term - working capital and current ratio, Accounting Basics

Assignment Help:

Determine the term - Working capital and current ratio

Determining these ratios would help a business determine if will have enough capital to operate and can meet their debts.

Working Capital is the amount of current assets minus amount of current liabilities.  This must be computed at the end of each period.

The larger the working capital, the better able the business is to pay its debts.

Working capital = current assets – current liabilities

Current Ratio current assets to current liabilities. A current ratio of 2:1 is usually considered acceptable.

Current ratio = current assets/current liabilities


Related Discussions:- Determine the term - working capital and current ratio

Is the interest on a note receivables recorded, Is the interest on a note r...

Is the interest on a note receivables recorded if paid prior to the due date? A. Debit to interest expense B. debit to interest payable C. Credit to interest receivable D. Credit

Show adjustments for deferred items, Q. Show Adjustments for deferred items...

Q. Show Adjustments for deferred items? This segment discusses the two types of adjustments for deferred items asset/expense adjustments and liability/revenue adjustments. In t

Financial statement analysis, FINANCIAL STATEMENT ANALYSIS Following th...

FINANCIAL STATEMENT ANALYSIS Following the preparation of the Financial Statements, they are examined by the business for the reason of analyzing the presentation of the compan

Describe about capital, Q. Describe about Capital? Capital -- money inv...

Q. Describe about Capital? Capital -- money invested in a business by its owners. On the right side or bottom of a balance sheet. Capital also denotes to machinery, buildings a

What do you mean by bookkeeping, Q. What do you mean by bookkeeping? Ac...

Q. What do you mean by bookkeeping? Accounting is frequently confused with bookkeeping. Bookkeeping is a mechanical procedure that records the routine economic activities of a

Explain about purchase discounts, Q. Explain about Purchase discounts? ...

Q. Explain about Purchase discounts? Purchase discounts frequently companies purchase merchandise under credit terms that permit them to deduct a stated cash discount if they p

Contract Account, contractee account is it an assets account or expenses Ac...

contractee account is it an assets account or expenses Account

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd