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    yungrockr's Avatar
    yungrockr Posts: 2, Reputation: 2
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    #1

    Mar 5, 2007, 08:39 AM
    Increasing the current ratio
    Propose several legitimate steps that management might take to increase the company's current ratio prior to year-end. (a chain of retail stores selling building materials, hardware and garden supplies)

    -Paying some debts.
    -Increasing your current assets from loans or other borrowings with a maturity of more than one year.
    -Converting non-current assets into current assets.
    -Increasing your current assets from new equity contributions.
    -Putting profits back into the business.
    Elaborate pleeasee.. :)
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Mar 6, 2007, 10:14 PM
    How does one increase current ratio?

    By either increasing Current Assets or by decreasing Current Liabilities.

    Pay debts.
    That does not increase current ratio, rather keeps it the same or decreases it, depending on if the debit was short or long term.

    Increase current assets with long term loans.
    That increase your CA, but does NOT increase your CL, therefore, increasing your overall current ratio.
    lniefer's Avatar
    lniefer Posts: 1, Reputation: 1
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    #3

    Nov 20, 2011, 11:27 PM
    Purchase of temporary investment for cash
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #4

    Nov 21, 2011, 07:30 AM
    This will not change your current ratio as you are increasing one current asset while decreasing another current asset by the same amount, therefore your current assets will not change.
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