Page 57 - Stakis Consolidated Teaching Note
P. 57
1991 1992
Current Asset Ratio 83975 41181
_______ ___________
268770 236084
= 0.31 = 0.17
5 : Acid Test Ratio
Current Assets - Stocks
________________________
Current Liabilities
Acid Test 80516 39204
________ ____________
269770 236084
= -0.30 = 0.17
The company performance can be set against the industry
as a whole. The hotel industry is similar to other service
sector industries in that most of its sales are paid for with
cash or credit card. In these circumstances an Acid Test
Ratio of 0.4 may be acceptable compared with
manufacturing industry’s 1.0.
