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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › performance management(liquity)
what problem arise when the current ratio became high….
Several things……
It could be because the business is taking too long to collect receivables; or the level of inventory is too high (so more risk of it becoming obsolete etc..)
Overall it could indicate too much money tied up in current assets that could instead be used to expand the business.
