Harrison Company Calculated the Following Amounts Concerning Its Financial Information

question 80

Essay

Harrison Company calculated the following amounts concerning its financial information for the years ending December 31,2018 and 2017:
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$\begin{array}{lrr}&2018&2017\\\text { Current ratio } & 3.1 \text { to } 1 & 2.0 \text { to } 1 \\\text { Profit margin } & 22 \% & 18 \%\end{array}$ Required:
Examine Harrison's ratios.Is the change in the current ratio favorable or not? Explain.

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Definitions:

Lend

The act of giving money or goods to someone with the expectation that it will be paid back in the future.

Consumption

The usage of resources or products for the purpose of satisfying human needs or wants.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal.

Income

The monetary payment received for one's work, investments, or other sources, primarily used for personal consumption, savings, and investment.