All of the Following Regarding the Current Ratio Are True

question 64

Multiple Choice

All of the following regarding the current ratio are true except:

• A)Current ratio is calculated by dividing current assets by current liabilities.
• B)Current ratio helps to assess a company's ability to pay its debts in the near future.
• C)Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit.
• D)Current ratio can affect a creditor's decision about whether to lend money to a company.
• E)Current ratio can reveal challenges in covering short-term obligations if it is less than 1.

---

Definitions:

Stringent Media Regulations

Strict rules and guidelines governing the content, operation, and impact of media outlets and communications.

Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and other people's behavior, attributing them to either internal dispositions or external situations.

Dimensions

Measures or aspects that define the characteristics of an object, situation, or experience.

Behavior

The behavior or responses of a person or system when influenced by external or internal factors.