Answer: The first ratio, which is the current ratio have them sitting at 5.5 when the average for 2016-2017 was 1.7
Explanation:
From doing three ratios, ABC are doing well above average when it comes to the ratios carried out. The first ratio, which is the current ratio have them sitting at 5.5 when the average for 2016-2017 was 1.7 this doesn't mean they are worth meeting up with their target yet but it would require more loans and them building on what they currently have. This ratio informs them on their stand on taking more loans or not.
With an average of 2.0 in the 2016-2017 year, they are at a 1.2. The lower this ratio is the more debt they can put themselves in and not have to worry about if they could pay it off or not
