This indicator is higher (≥0,75) demonstrate short-term assets of enterprises can afford convertible into cash to pay short-term debt after deducting the value of inventories. However, if this indicator is too high can lead to stagnant enterprise assets resulting capital efficiency is not high.
This index is lower (<0.75) to demonstrate the full value of current assets limit after deducting the value of inventories in the business can not afford to repay short-term debt, if prolonged will appear risky financially.
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