Listed Below Are the Current Ratios of Four Different Companies

question 151

Multiple Choice

Listed below are the current ratios of four different companies.Based on these current ratios,which company is in the most liquid position?

• A)2.0
• B)1.8
• C)2.5
• D)2.1

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Definitions:

Current Ratio

A financial ratio indicating the capacity of a firm to cover its short-term liabilities with its current assets.

Loan Collateral

Assets a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Coupon Rate

The annual interest rate paid by a bond expressed as a percentage of the face value.

Market Rate

The current interest rate offered in the market for securities or loans.