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Essay's paper info
Topic: Business
Number of pages / Number of words: 7 / 1793
Essay's paper body

The ideal ratio is 2:1 so for every pound you have pounds.

Current ratio= Current Assets

Current liabilities

The ratio in 2007 is 3.05:1 which is quite high in 2009 it was 2.41:1 which is nearer the ‘ideal’ ratio. In 2007 the business is more liquid, liquidity is vital to survive. The ideal is 2:1 and they are nearly there in 2009...


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The ideal is 2:1 and they are nearly there in 2009. In 2007 with a ratio 3.05:1 it may tie up funds that could be used elsewhere.

Acid Test

This ratio is similar to the current ratio but it represents more of a strict test of liquidity. It is quite true that stock can’t sell as quickly as anyone would like so the acid test takes away the stock/ inventory as this can’t be sold quickly...


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