Accounting for IGCSE & O level - Advanced Principles (Section 5 - No. 36)
What could cause a business to have a poor current ratio?
A low level of current liabilities
A high level of current assets.
The combined value of all its assets is sufficient in cash
Insufficient combined value of all its assets in cash to pay current liabilities
Explanation
A poor current ratio is indicative of a business which doesn't have enough cash or liquid assets to pay off its current liabilities
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