Effect on Current Ratio: Paying Liability

AFM Ratio Analysis Free JAIIB Capsule 20 views Updated 16 Sep 2026

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Business transactions immediately impact a firm's short-term ratios. If a firm pays off a current liability out of its current assets, assuming the ratio is above 1, how does it affect the current ratio?

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Business transactions immediately impact a firm's short-term ratios. If a firm pays off a current liability out of its current assets, assuming the ratio is above 1, how does it affect the current ratio?

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