The following information is available for Flanders and its two main competitors in the industry, Sanders and Anders: The industry standard for the current ratio is 1.8 and the industry standard for the acid-test ratio is 1.
Required:
1. Calculate the current ratio and acid-test ratio for each firm.
2. Rank the firms in decreasing order of liquidity.
3. Comment on Flanders' relative liquidity position.

Question

The following information is available for Flanders and its two main competitors in the industry, Sanders and Anders:  The industry standard for the current ratio is 1.8 and the industry standard for the acid-test ratio is 1.
Required:
1. Calculate the current ratio and acid-test ratio for each firm.
2. Rank the firms in decreasing order of liquidity.
3. Comment on Flanders' relative liquidity position.

Quizplus · Accepted Answer

The Answer of The following information is available for Flanders and its two main competitors in the industry, Sanders and Anders:  The industry standard for the current ratio is 1.8 and the industry standard for the acid-test ratio is 1.
Required:
1. Calculate the current ratio and acid-test ratio for each firm.
2. Rank the firms in decreasing order of liquidity.
3. Comment on Flanders' relative liquidity position.

The Following Information Is Available for Flanders and Its Two