Incorporation E’s president proudly exposed that the company’s liquidity is increasing year by year, as there is substantial increase in the current ratio from year to year. To analyze: Whether an increase in the current ratio always indicates improved liquidity, and suggest other ratios, which helps to measure an increase in the current ratio is an improvement in financial health.

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Chapter 8, Problem 20Q

To determine

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Incorporation E’s president proudly exposed that the company’s liquidity is increasing year by year, as there is substantial increase in the current ratio from year to year.

To analyze: Whether an increase in the current ratio always indicates improved liquidity, and suggest other ratios, which helps to measure an increase in the current ratio is an improvement in financial health.

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