The Current Ratio

question 308

Multiple Choice

The current ratio:

• A) Analyzes long-term financial viability.
• B) Will normally have a lower value than the quick ratio.
• C) Is a measure of short-term liquidity.
• D) Considers all debt obligations of a firm.
• E) Indicates the turnover rate of a firm's accounts receivable.

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Definitions:

Classical

Pertaining to the school of economic thought that emphasizes free markets, free trade, and the idea that economies self-regulate through supply and demand.

John Maynard Keynes

A British economist whose theories on the influences of macroeconomic factors on economic output and government interventions shaped modern economics.

Savings

The portion of disposable income not spent on current consumption but set aside for future use, often in a deposit account or as investments.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.