The Current Ratio Is a Measure of Liquidity

question 39

Multiple Choice

The current ratio is a measure of liquidity. What information does it tell you?

• A) It tells you how many current assets you own free and clear.
• B) It tells you how much your debt payments for the current period are.
• C) It tells you how many times you can pay off your current liabilities by using your liquid assets.
• D) It tells you what portion of your total liabilities are current liabilities.

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