Limitations in Ratio Analysis A supplier is thinking of extending credit to a company but decides… 1 answer below »

Limitations in Ratio Analysis A supplier is thinking of extending credit to a company but decides… 1 answer below »

Limitations in Ratio Analysis

A supplier is thinking of extending credit to a company but decides not to because the company’s

current ratio is only 0.50. Do you agree with the supplier’s decision? What other factors need to

be considered in drawing any conclusions about a company’s liquidity?

 

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