Ratio Essay Examples

Ratios in Accounting) Question 1. The current ratio for Potz and Pans has been calculated as 5.00:1 whereas the current ratio for WannaBees has been calculated as 1.76:1. Based on these results, it is prudent to assume that Potz and Pans is most likely to get the loan, although WannaBees also has good results. This is because the ratio is a measure of a company's capacity to meet its financial obligations. Both companies have current ratio figures greater than 1 to indicate that their assets are greater than the liabilities. Given that Potz and Pans has the highest ratio, it can be inferred that this is an indication that the company is financially well off. Still, the figures must be approached...