Which of the Following Statements Is True of Current Ratio

question 18

Multiple Choice

Which of the following statements is true of current ratio?

• A) It evaluates the retailer's ability to pay its short-term debt obligations.
• B) It evaluates the optimal profitability of the retailer.
• C) It evaluates the optimal productivity of the retailer.
• D) It evaluates the cost incurred by human resources against organizational profitability.
• E) It evaluates the retailer's ability to pay its long-term debt obligations.

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Definitions:

Sole Shareholder

An individual or entity that owns 100% of the shares of a company, holding complete ownership.

Annual Percentage Rate

The annual rate charged for borrowing or earned through an investment, which includes all fees and costs.

Effective Annual Rate

The interest rate that describes the full amount of interest paid over one year, considering compounding.

APR

Annual Percentage Rate; the annual rate charged for borrowing or earned through an investment, inclusive of any fees or additional costs.