Large Current Ratios Indicate the Availability of Cash and near Cash

question 18

Short Answer

Large current ratios indicate the availability of cash and near cash assets to repay ____________________ coming due within the next year.

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Definitions:

Investment Center

A business unit within an organization that is responsible for its own revenues, expenses, and investments, and is evaluated on its return on investment.

Operating Assets

Assets that are used in the daily operations of a business to generate revenue, such as machinery, buildings, and equipment.

Controllable Margin

The portion of income that remains after deducting controllable expenses, indicating the earning performance that management can influence.

Controllable Costs

Expenses that a manager or business has the power to influence or change in the short term.