WCR and DR

Question 1

how to figure out working capital ratio

Answer 1

current assets divided by current liabilities. then wrote :1

Question 2

how to figure out debt ratio

Answer 2

liabilities divided by assets x 100. written in percentage

Question 3

what is a problem with business having too much working capital

Answer 3

may indicate that the business has overabundance of current assets that are not being employed effectively.

Question 4

strategies to improve debt ratios

Answer 4

reduce expenses, increase income

Question 5

what is liquidity

Answer 5

liquidity refers to the ability of a business to meet its short-term debts as they fall due and can be measured.

Question 6

what is stability

Answer 6

stability concentrates on the firms ability to meet its obligations in the long-term

Question 7

what is working capital ratio

Answer 7

compares a firms current assets and current liabilities to determine whether the business has sufficient economic resources to cover its present obligations.

Question 8

what is debt ratio

Answer 8

debt ratio measures what percentage of the firms assets are funded by external sources