The Current Ratio

question 236

Multiple Choice

The current ratio

• A)Is current assets divided by current liabilities
• B)Helps to assess a company's ability to pay its debts in the near future
• C)Reveals problems in a business if it is less than 1
• D)Is current assets divided by current liabilities and helps to assess a company's ability to pay its debts in the near future
• E)All of these

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Definitions:

Accepting Deposits

A banking activity that involves receiving money from customers for safekeeping or for earning interest, typically in savings or checking accounts.

Systematically Important

Refers to entities or institutions whose failure could trigger a financial crisis, necessitating regulatory oversight to ensure stability.

Economic Growth

An increase in a country's capacity to produce goods and services, compared from one period of time to another.

Credit Default Swaps

Financial derivatives that allow an investor to swap or offset their credit risk with that of another investor.