How do you calculate the current ratio, debt ratio, and savings ratio?
What will be an ideal response?
Answer: Current ratio is calculated by dividing total current assets by total current liabilities. A ratio of 1.0 will get you by, but a ratio of 2.0 or more is preferred. The debt ratio is determined by dividing total debt or liabilities by total assets. The savings ratio is found by dividing the income available for savings and investments by income available for living expenses.
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LP's ease of conversion to another business form?
What will be an ideal response?
To save money on legal fees, a client requests a paralegal to prepare a contract in her spare time in the evenings. She does so and sends the contract directly to the client along with her personal invoice. Firm procedure requires that all legal work be reviewed and approved by an attorney. The firm likely will not be liable for any losses resulting from the shoddy contract because the:
A. preparer was not a licensed attorney. B. paralegal acted outside the scope of her employment. C. client got what he or she paid for D. client will not be able to prove causation.