An electrical contractor with $60,000 in current assets and $75,000 in current liabilities has a current ratio that indicates strong working capital health, which will likely satisfy a surety company's requirements for bond approval.
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Electrician Business Operations
Running an Electrical Contracting Business Course
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When banks and surety companies evaluate an electrical contracting business, what does a current ratio below 1.0 indicate?
The construction-industry average current ratio, as benchmarked by CFMA and used by banks and surety companies to evaluate contractor financial health, is ____.
Match each current ratio concept with its correct meaning or practical implication for an electrical contracting business.
An electrical contractor with $60,000 in current assets and $75,000 in current liabilities has a current ratio that indicates strong working capital health, which will likely satisfy a surety company's requirements for bond approval.
Analyze the causal chain of financial deterioration for an electrical contractor. Arrange the following events in the logical sequence that illustrates how a shift in working capital leads to external operational restrictions.
An electrical contractor currently has $110,000 in current assets and $100,000 in current liabilities, giving a current ratio of 1.1—well below the construction-industry benchmark of 1.6. The contractor needs to strengthen this ratio before applying for a surety bond on a large commercial project next quarter. Which of the following actions should the contractor prioritize to most effectively improve the current ratio for bond approval?