1.
Concept Introduction:
The Current ratio for LM.
2.
Concept Introduction: Current ratio is a liquidity ratio that measures the company’s ability to pay its short-term obligations. It is determined by dividing the total of current assets by the total of current liabilities. A strong current ratio is 1.5 which indicates that the company has $1.5 on each $1 of current liability. A current ratio of 1 or less is considered risky.
Using the current ratio, the dollar of current asset available for each dollar of current liability.
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Horngren's Financial & Managerial Accounting
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