Which of the Following Statements About Liquidity Ratios Is True

question 28

Multiple Choice

Which of the following statements about liquidity ratios is true?

• A)The higher the current ratio,the more likely a firm is able to pay its short-term obligations
• B)The lower the quick ratio relative to the current ratio,the safer a firm is in terms of liquidity
• C)The lower the current ratio,the more likely a firm is able to pay its short-term obligations
• D)Relatively high current ratios are usually a sign of efficient working capital management

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