Total Marks 5
Starting Date Thursday, June 02, 2022
Closing Date Wednesday, June 08, 2022
Question Title GDB
Mr. Anwar is recently appointed as CEO of ABC Corporation Limited. As a new head of the organization, he wants a briefing regarding the current situation of different departments in the organization. During the briefing from Chief Financial Officer (CFO) of the organization, he comes to know that the liquidity position of the company is not sound as the current and quick ratios are 0.90 times and 0.30 times respectively. Mr. Anwar is a mechanical engineer and lacks the financial knowledge to comprehend the financial information.
Being a student of Business Finance, how would you interpret the results of current ratio and quick ratio to Mr. Anwar with reference to the liquidity position? If both ratios measure the liquidity, why is there a difference in their figures?
Your discussion must be based on logical facts.
Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course.
Obnoxious or ignoble answer should be strictly avoided.
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