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15 September, 14:41

An investor knows the total assets and total liabilities of a company, but they are not sure how much of the assets and liabilities are current versus long-term. Based on this, the investor could calculate

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  1. 15 September, 15:47
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    The investor must find Current Ration and Quick Ratio.

    Explanation:

    The reason is that the current ratio tells that how much of the current assets are financed from the current liabilities. This gives a better understanding of the financing of the working capital through current liabilities. The quick ratio does the same but the effect of the inventory is eliminated.
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