Harrison Company calculated the following amounts concerning its financial information for the years ending December 31, 2015 and 2014:
REQUIRED:
Examine Harrison's ratios. Is the change in the current ratio favorable or not? Explain.
Definitions:
Maximum Sales
The highest amount of sales a company can possibly achieve within a given timeframe under existing conditions.
Constant Ratio
A strategy or measure that remains unchanged over a period of time, often used in financial contexts to describe stable investment proportions or fixed financial ratios.
Retained Earnings
Represents the portion of net income that is not distributed to shareholders but retained by the company for reinvestment in its operations or to pay debt.
Dividend Payout Ratio
The fraction of net income a firm pays to its shareholders as dividends, typically expressed as a percentage.
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