Current Ratio Less Than 1
When the current ratio is greater than 1 it means the current liabilities of the company are greater than its current assets whereas. Current Ratio 1. Acid Test Ratio Meaning Formula Calculation Interpretation However you should remember that a higher current ratio doesnt always mean that your business is in a healthier financial position. . In airline business equity to assets ratio is also very low as airlines leverage assets upto 80 to 90 of their total assets because of very high cost of capital. However an investor should also take note of a companys operating cash flow in order to get. Some types of businesses can operate with a current ratio of less than one however. It might be very common in certain. A current ratio of less than 1 indicates that the company may have problems meeting its short-term obligations. Given the structure of the ratio with assets on top and liabilities on the bottom ratios above 10 are sou...
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