The Purpose of the Current Ratio Is to Evaluate the Firm's

question 42

Multiple Choice

The purpose of the current ratio is to evaluate the firm's ability to:

• A)Generate sales with a given level of current assets.
• B)Utilize current assets profitably.
• C)Pay its bills in the short run.
• D)Effectively use borrowed funds.

---

Definitions:

Informal Rule Making

A regulatory process where governing bodies develop and issue rules or regulations without engaging in formal procedures such as public hearings.

Notice-and-Comment

A procedure required by law whereby a government agency must publish a proposed rule and allow the public to comment on it before it becomes enacted.

Hybrid

Anything that combines two different components, systems, or technologies to create something that has elements of both, often with an aim to gain specific advantages.

Federal Independent Agencies

Agencies that exist outside of the federal executive departments (those headed by a Cabinet secretary) and are designed to enforce and regulate specific matters.