A Company Has a Current Ratio of 0

question 76

Multiple Choice

A company has a current ratio of 0.85 to 1.What should a manager in the company worry about?

• A)The company has too many assets and is not using them efficiently.
• B)The company has too much inventory.
• C)The company may start to have trouble paying salaries.
• D)The company is paying salaries that are too high.

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Definitions:

Certificate of Deposit

A savings certificate with a fixed maturity date and specified fixed interest rate that is issued by banks.

Income Stocks

Shares in companies that regularly distribute a high portion of their earnings to shareholders in the form of dividends.

Traditional IRA

A savings plan in which the income generated by the account is tax-deferred until it is withdrawn from that account.

Tax Liability

The total amount of tax that an individual or organization owes to the tax authorities.