Hi John, I’m a bit confused regarding the way you calculated the current ratio. It says on the notes (and you also said) that we use the current asset. However you have put 5,553 which is the total assets (including non-current asset, etc.) Is there a reason why we call it current asset? Thanks for your help and the amazing lectures. Alan
What is the maximum acceptable current ratio? For one to easily conclude that current ratio is too high, therefore might not be good for the company. Or what is the acceptable range for current ratio?
There is such thing as an acceptable ratio (except that obviously it should be more than 1). It depends on the type of business and therefore it is only by comparing with other similar businesses, or with pervious years, that we can say that maybe it is getting too high.
Will we be allowed to use calculators? These calcs are too hard.
Yes of course it is allowed 馃檪
Hi John,
I’m a bit confused regarding the way you calculated the current ratio. It says on the notes (and you also said) that we use the current asset. However you have put 5,553 which is the total assets (including non-current asset, etc.) Is there a reason why we call it current asset?
Thanks for your help and the amazing lectures.
Alan
I think maybe you have misread the question, because 5,553 is the total of the current assets and does not include the non-current assets.
Indeed I confused the current asset line with the Inventory line.
Thanks for the clarification.
You are welcome 馃檪
What is the maximum acceptable current ratio? For one to easily conclude that current ratio is too high, therefore might not be good for the company. Or what is the acceptable range for current ratio?
There is such thing as an acceptable ratio (except that obviously it should be more than 1). It depends on the type of business and therefore it is only by comparing with other similar businesses, or with pervious years, that we can say that maybe it is getting too high.
Hi John,
Really enjoying the lectures!
Just a heads-up – the Average Payment Periods are surprisingly low because you’ve multiplied by 100 instead of 365!
Or was that a test… 馃槈
Ooops 馃檪
Thanks for that.
Thank you so much John! I passed F1 F2 and F3 (today) in 4 months and it all happened because of OpenTuition and you! God bless and thanks 馃檪
Many congratulations – that is great news 馃檪
Passed my F3 exam (CBE) today – thank you Open Tuition. You are so helpful.
Thats is great – many congratulations 馃檪
Hello, an a new member of this educative site. Hoping it helps me get all i need to pass my ICAN (institute of chartered accountant of nigeria).
I hope it helps you as well -)