All of the Following Regarding Current Ratio Are True Except

question 87

Multiple Choice

All of the following regarding current ratio are true except:

• A)Current ratio is calculated by dividing current assets by current liabilities.
• B)Current ratio helps to assess a company's ability to pay its debts in the near future.
• C)Current ratio does not affect a creditor's decision on when to allow a company to buy on credit.
• D)Current ratio can affect a creditor's decision about whether to lend money to a company.
• E)Current ratio can reveal problems in a company if it is less than 1.

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Definitions:

Human Behavior

The range of actions and mannerisms exhibited by humans in conjunction with their environment, social structures, and culture.

Determination

The firmness of purpose or the resolve to achieve a goal despite obstacles or difficulties.

McGregor's Theory X

A management theory that assumes employees are inherently lazy and will avoid work if they can, requiring strict supervision and control.

Financial Incentives

Monetary rewards given to motivate employees, increase productivity, or achieve certain business goals.