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HSC Business Studies Transcendent Understanding.
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7
March 2024
2023/2024
A
The lower the ratio, the better as it indicates efficiency in the individual expenses
Accounts receivable turnover = Sales ÷ Accounts Receivable x 100
High turnover ratios indicate that the business has efficient debt collection. The bigger
the number, the worse it is
Liquidity
Ability to pay short term liabilities
The amount of current assests should be higher than its debts
Current Ratio = Current Assets ÷ Current Liabilities
2:1 is considered in a good, stable financial position
So...
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