Historically, It Was Thought That the Current Ratio Should Be

question 218

Multiple Choice

Historically, it was thought that the current ratio should be ________, but more recently, many firms that are financially strong operate with current ratios of ________.

• A) at least 10:1; less than 5:0
• B) more than 7:1; 2.0
• C) less than 5:1; more than 10:1
• D) 2:1; less than 2:1
• E) 3:1; less than 5:1

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Definitions:

Variety

The presence of multiple different items or options within a collection, offering a selection to choose from.

Average Inventory

The average amount of stock held by a company over a specified period, calculated to understand inventory levels and manage them efficiently.

Setup Times

The duration required to prepare equipment, machines, or systems for production or operation, including adjustments for new tasks or products.

Competitive Advantage

The attribute that allows an organization to outperform its competitors, often through superior quality, innovation, or efficiency.