The Current Ratio Is Not the Most Stringent Measure of Liquidity

question 18

Multiple Choice

The current ratio is not the most stringent measure of liquidity, because it ____.

• A) is difficult to calculate
• B) includes some items, such as inventory, that may not be readily liquid
• C) requires many years of past data
• D) includes many non-current items in its calculation

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Definitions:

Shared Culture

The common beliefs, practices, norms, and values among a group of people that guide behavior and foster a sense of community.

Appearance

The way that someone or something looks, which can include aspects of dress, grooming, physical characteristics, and overall presentation.

Adaptive Mechanisms

Psychological strategies used by individuals to adjust to their environment and mitigate stress.

Family Structures

The various forms and configurations of family units in society, including nuclear families, extended families, and other arrangements.