A Current Ratio of 6

question 20

Multiple Choice

A current ratio of 6.0 is usually an indication that the firm:

• A)has a low degree of liquidity.
• B)has a reasonable degree of liquidity.
• C)has not made the most productive use of its assets.
• D)has made the most productive use of its assets.

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Definitions:

Major Failure

A significant breakdown or malfunction in a system, project, or product that impedes its intended function.

Exemption Clauses

Provisions in a contract that aim to limit or exclude one party's liability in certain circumstances.

Exculpatory Clauses

Provisions in a contract that relieve one party from liability for wrongdoing.

Restrictions

Limitations or conditions imposed on activities, operations, or behaviors to regulate them legally or socially.