Calculate the Current Ratio and the Acid-Test Ratio

question 49

Multiple Choice

Calculate the current ratio and the acid-test ratio. Is the company healthy based on the guidelines given in the text?
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• A)Current ratio = 1.31 which is too low Acid-test ratio = 2.09 which is fine
• B)Current ratio = 2.09 which is fine Acid-test ratio = 1.60 which is fine
• C)Current ratio = 2.09 which is fine Acid-test ratio = 1.31 which is fine
• D)Current ratio = 1.60 which is low Acid-test ratio = 1.31 which is fine

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Definitions:

Situation

A set of circumstances or a scenario in which individuals find themselves, affecting their behavior and decision-making.

Main Limitation

the primary constraint or shortcoming that restricts effectiveness, progress, or development in a certain context or system.

Consideration

A leadership behavior characterized by showing concern and respect for followers, looking out for their welfare and creating a friendly work environment.

Effective Leadership

Involves influencing, motivating, and enabling others to contribute toward the effectiveness and success of the organizations of which they are members.