It Is Important to Review Not Just the Current Ratio

question 32

Multiple Choice

It is important to review not just the Current Ratio, but also the Quick Ratio and Cash Ratio because:

• A)the Cash Ratio must always provide a greater statistic than the Current Ratio and Quick Ratio.
• B)the Quick Ratio includes inventory that can be easily liquidated for cash.
• C)a low Current Ratio may not necessarily indicate a problem with a company.
• D)companies can operate with a Cash Ratio close to zero and maintain liquidity.
• E)GAAP requires it.

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Definitions:

Bureau of Labor

A government agency responsible for collecting and analyzing labor economic data, including employment, wages, and productivity.

Male Workers

Refers to the segment of the workforce that is composed of males, often analyzed in studies related to labor and employment.

Median Age

The age that divides a population into two numerically equal groups; half the people are younger than this age and half are older.

Nearest Year

A time measurement rounding to the closest year, often used in demographic or historical data to simplify representations.