A Current Ratio Greater Than 1 Can Tell Us That

question 7

Multiple Choice

A current ratio greater than 1 can tell us that the company ________.

• A)should be able to cover the current liabilities
• B)should be able to keep away from short-term cash problems
• C)may have too much capital tied up in current assets
• D)All of these

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Definitions:

Efficiencies

The ability to accomplish a job with a minimum expenditure of time and effort. The effectiveness of productive effort, especially in industry, as measured in terms of the rate of output per unit of input.

Production Processes

The sequence of operations or activities involved in the conversion of raw materials or inputs into finished goods or services.

Labour Costs

The total sum of all financial payments and benefits, including wages, salaries, and benefits, made to employees for their work.

Improve Operations

Strategies or actions undertaken to enhance the efficiency, effectiveness, and quality of business operations.