Rosss Lipstick Company Essay
Long-term investments are often intended to be used in an organizational setup for an extended period usually one year. Short-term investments, on the other hand, include investments or assets available in a company that is intended to be used for a shorter period. Unlike the long-term investments, short-term financing is often sold after a while the former are safeguarded for future use in the company in question (Epstein, 2008). Short-term assets are essentials as they allow the management of an organization to be adequately equipped towards evaluating the financial strength of their company as well as be able to understand whether the same company can pay off its overall debts within 12 months. Current ratio refers to current assets/ current liabilities. The liquidity in the company allows the management in the organization to remain afloat about ensuring that its overall sales level are improved to a state that guarantees an increase in the profits of the organization (Gupta K.
The reclassification of long-term investments to current ones does not mean that Ross’s managers are unethical. The sole aim of the managers, in this case, was to ensure that the company would be able to meet the demands that are more likely to enable it to grow. This was mainly essential because the organization was on the verge of collapsing as a result of poor economic conditions facing it at the time. The intentions of the managers can, therefore, be classified as honest since they are inclined towards meeting the obligations accruing the company. Regardless of what might be the case, the outcomes of the actions of the company can be said to be substantial as they were able to meet the requirements that had previously been projected (Gupta A.
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