Windham corporation has current assets of $740,000 and current liabilities of $925,000. Windham corporation's current ratio would be increased by 0.8 %
current ratio = current assets /current liabilities = 7,40,000/9,25,000 = 0.8%
What does current ratio mean?
A liquidity ratio called the current ratio assesses a company's capacity to settle short-term debts or those that are due within a year. It explains to investors and analysts how a business can use its present assets to the fullest extent possible to pay down its current liabilities and other payables. A healthy current ratio is normally between 1.5 and 2, but it occasionally depends on the sector of the economy in which your business operates.
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