A current ratio of less than 1.0 for a hospitality company is always bad.

Question

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A current ratio of less than 1.0 indicates that a company's liabilities are greater than its assets due within a year. However, this isn't always bad, as some companies, especially in the hospitality industry, might have high turnover rates of their inventory or efficient cash flows that allow them to operate smoothly even with a lower current ratio. It's also possible for businesses to have negotiated long-term payment terms with their suppliers, reducing the immediate need for high current assets. The context of the industry and the specific business model should be considered.

A Current Ratio of Less Than 1