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Essay

liquidity

Essay specific features

 

Issue:

Business

 

Written by:

Ernest A

 

Date added:

October 10, 2012

 

Level:

University

 

Grade:

A

 

No of pages / words:

2 / 550

 

Was viewed:

1458 times

 

Rating of current essay:

 
Essay content:

The higher the ratio, the more liquid the business is considered to be. Some people seem to suggest there is an ‘ideal’ current ratio (usually 2:1) for all businesses however this fails to take into account the fact that different types of businesses require different current ratios. For example, a manufacturing business will often have a high current ratio because it is necessary to hold raw materials and will normally sell goods on credit, thereby incurring debtors...
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For example, a manufacturing business will often have a high current ratio because it is necessary to hold raw materials and will normally sell goods on credit, thereby incurring debtors. A supermarket chain, on the other hand, will have a low current ratio, as it will only hold fast-moving stock and will generate mostly cash sales revenue...
displayed 300 characters

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