Asked by Dangerously Loved on Jun 26, 2024
Verified
Harry's Bikes' current ratio is 1.3. The industry average for the current ratio is 1.2. This indicates that Harry's Bikes can cover its short term liabilities with its short term assets.
Short Term Liabilities
Short Term Liabilities are obligations a company needs to pay within a year, including loans, accounts payable, and other debts.
- Understand the objective and computational method of financial ratios, including the current ratio.
Verified Answer
JB
Junace BolandJun 27, 2024
Final Answer :
True
Explanation :
Harry's Bikes' current ratio of 1.3 is higher than the industry average of 1.2, indicating that it has enough short term assets to cover its short term liabilities. Therefore, the statement is true.
Learning Objectives
- Understand the objective and computational method of financial ratios, including the current ratio.