AO2 = 3 marks AO3 = 3 marks
AO2
- TBTS can find it useful to use these ratios as they can see it increases from 0.75 in 2018 to 0.88 in 2020
- TBTS can use it to see that they may need to take out any short-term finance for new projects such as the range of new toys for 4-year-olds
AO3
- This can help TBTS see if they have enough cash to cover any short-term debts to creditors such suppliers of toys and help them to keep a good relationship with the suppliers by paying on time.
- The ratios show they need to be cautious as each year the acid test ratio is below 1