All Other Things Being Equal, a Higher Current Ratio Indicates

question 43

Multiple Choice

All other things being equal, a higher current ratio indicates that _____.

• A)the company has excess cash
• B)a creditor is likely to be paid in full and on time
• C)the company's long-term debt is due soon
• D)a customer is likely to pay in full and on time

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Definitions:

Value-based Management

A management approach that focuses on creating maximum value for shareholders and customers by basing decisions on their potential to increase value.

Economic Value

The value that an asset or service provides to its user, often measured in terms of its ability to generate income or save costs.

Value Drivers

Factors that significantly impact the value of a company's products or services, which in turn affect the company's profitability and market value.

Decrease Value

A reduction in the worth or value of an asset or entity.