A Weakness of the Current Ratio Is

question 108

Multiple Choice

A weakness of the current ratio is

• A) the difficulty of the calculation.
• B) it uses year-end balances of current asset and current liability accounts.
• C) it is rarely used by sophisticated analysts.
• D) it can be expressed as a percentage, as a rate, or as a proportion.

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Definitions:

Demand

Pertains to the desire and capability of consumers to buy products and services at various price points.

Full Employment

A condition in an economy where all accessible labor resources are utilized in the most effective manner.

Expected Rate Of Profit

The anticipated return on an investment, considering potential risks and rewards.

Recessions

Periods of economic decline lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.