What ratios are impacted by the cash purchase of vehicles?
submitted by B Cummins

yellow no5

Buying a vehicle with cash will reduce your cash amount, which is part of your current assets. So, the current ratio might go down because you have less cash compared to your liabilities. The total assets go up because of the new vehicle, but since you paid cash, your ability to pay short-term debts could look worse.

reddles

If you paid cash, it will change your current ratio. So, your current assets go down, but your total assets go up because of the vehicle. The quick ratio might also change a little if you look at just the most liquid assets. Basically, cash leaving your account makes your liquidity ratios look a bit weaker.