President1988

Dreary Wrote:
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> Current ratio = CA/CL. In my notes, it clearly
> says that if exchange rate goes down, currency
> depreciating, that CR goes down under current rate
> method. This does not make sense to me now...I'm
> thinking that it doesn't change. We are using
> current exchange rate for all assets and
> liabilities. So, if you multiply CA by $0.90 and
> liabilities by $0.90 (assuming this is the new
> exchange rate), ratio does not change. Example
> 10/8 = 1.25. Multiply both 10 and 8 by 0.90, you
> get 9/7.2 = 1.25.


fix you notes then Banj got it right. Under temporal it would change