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Which of the Following Financial Ratios Is the Correct Formula

question 49

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Which of the following financial ratios is the correct formula for the current ratio?


Definitions:

Liabilities

The financial liabilities a firm has towards other parties, necessitating reimbursement through the provision of economic gains over a specified duration.

Increase Assets

An action or transaction that results in a rise in the total value of assets owned by an individual or entity.

Decrease Assets

Decrease in assets refers to a reduction in the economic resources controlled by a company, which can result from expenses, asset disposals, or liabilities being paid off.

Accounting Equation

The foundational equation in accounting, represented as Assets = Liabilities + Owner's Equity, illustrating a company's financial position.

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