The Current Ratio Is

question 151

Multiple Choice

The current ratio is

• A) calculated by dividing current liabilities by current assets.
• B) used to evaluate a company's liquidity and short-term debt paying ability.
• C) used to evaluate a company's solvency and long-term debt paying ability.
• D) calculated by subtracting current liabilities from current assets.

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Definitions:

Motivated

The state of having a desire or willingness to act or achieve something, driven by internal or external factors.

Construct System

A psychological framework that refers to an individual's unique organization of concepts and perceptions.

Predicts Events

The act of forecasting or projecting future occurrences based on current or past data.

Fragmentation Corollary

A principle from Kelly's personal construct theory suggesting that individuals can hold seemingly contradictory beliefs or constructs that are contextually applied.