The Current Ratio Is a Measure of Liquidity That Reflects

question 58

Multiple Choice

The current ratio is a measure of liquidity that reflects

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

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Definitions:

Financial Ratio

A quantitative analysis used to evaluate a company's financial performance, liquidity, leverage, and efficiency by comparing two financial figure.

Program Expenses

The costs directly associated with carrying out an organization’s mission-related activities, as opposed to administrative or fundraising expenses.

Permanent Restriction

A binding condition or stipulation that indefinitely limits the use of an asset or the execution of an action.

Philanthropic Gift

A donation made by an individual or an organization to a nonprofit entity, typically for charitable purposes or to support a cause.