Ratio Analysis - unexpected cash needs. Current ratio. The...

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Ratio Analysis Ratio analysis  is used to evaluate relationships among financial statement items. The ratios are  used to identify trends over time for one company or to compare two or more companies at one point  in time. Financial statement ratio analysis focuses on three key  aspects of a business: liquidity,  profitability, and solvency.  Liquidity ratios Liquidity ratios  measure the ability of a company to repay its short-term debts and meet 
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Unformatted text preview: unexpected cash needs. Current ratio. The current ratio is also called the working capital ratio, as working capital is the difference between current assets and current liabilities. This ratio measures the ability of a company to pay its current obligations using current assets. The current ratio is calculated by dividing current assets by current liabilities....
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This note was uploaded on 11/15/2011 for the course ACCT 2310 taught by Professor Staff during the Spring '09 term at Texas State.

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Ratio Analysis - unexpected cash needs. Current ratio. The...

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