Which of the Following Statements About Liquidity Ratios Is True

question 40

Multiple Choice

Which of the following statements about liquidity ratios is true?

• A)The higher the current ratio, the more likely a firm is able to pay its short-term obligations
• B)The lower the quick ratio relative to the current ratio, the safer a firm is in terms of liquidity
• C)The ratio of net working capital to total assets always lies between 0 and 1
• D)Relatively high current ratios are usually a sign of efficient working capital management
• E)The lower the current ratio, the more likely a firm is able to pay its short-term obligations

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Jurisdiction

The official power to make legal decisions and judgments, often within a defined area or subject.

Federal Court

A type of court in the United States that has jurisdiction over cases involving federal laws, interstate matters, and other specific cases as defined in the U.S. Constitution.

Jurisdiction

The official power to make legal decisions and judgments, usually referring to a geographic area or type of law.

Original Jurisdiction

The authority of a court to hear a case when it is first brought to court.