It was revealed that the Kovur Cooperative Sugar Factory maintained current ratio below the standard norms, and the cash and bank balance when compared to current assets
Going back to the example of the trading firm, that portion of its total debt which is covered by current assets
As can be seen in the Table, the share taken by current assets
item from active assets in 2005-2008 seems to gradually increase on a pro rata basis.
If the premise is accepted that CPLTD is repaid from CPFA and not from current assets
, it must follow that the current ratio is flawed by including CPLTD as a current liability that must be paid from current assets
If a firm's current assets
are large relative to the value of current liabilities, there is a high probability that the firm can pay the liabilities as they come due.
For this purpose ratio of raw materials to current assets
, work-in-progress to current assets
, finished goods to current assets
To the extent that the turnover of the firm's current assets
is greater than the turnover of the firm's current liabilities, the CLI will be greater than the standard current ratio.
To many companies, current assets
are more important than fixed assets.
Montclair Medical Associates Statement of assets and liabilities--modified cash basis December 31, 1994 Assets Current assets
Cash $600,000 Prepaids 2,000
The new standard would begin by combining parts of IAS 1, Disclosure of Accounting Policies, IAS 5, Information to Be Disclosed in Financial Statements, IAS 13, Presentation of Current Assets
and Current Liabilities, other existing standards and the IASC Frame-work for the Preparation and Presentation of Financial Statements.
At the end of fiscal year ended June 30, 2006, the Company had $201,845 of current assets
and $458,474 of current liabilities compared to $107,715 in current assets
and $276,748 in current liabilities for fiscal year 2005.
The purchase price is subject to adjustment dependent upon Valence's net current assets
as of June 30, 2006 as determined by the parties' auditors.