The formula current ratio= current assets/current Liabilities current financial ratio. The ratio is used to evaluate the performance of a business. the formula can be written in symbols as c=a/L solve the formula for a
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Step 1: Start with the formula for the current ratio, which is given as \( c = \frac{a}{L} \). Show more…
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The current ratio of any business organization is the ratio of its current assets to its current liabilities. Let's say you are acting as the Managing Director of ACE Equipment Co. and have decided to obtain a short-term loan to build up inventory. The company has current assets of N350,000 and current liabilities of N80,000. How much can the Managing Director borrow if the company's current ratio must be not less than 2.5? Note that funds received are considered current assets and loans are considered current liabilities.
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