Which of the Following Statements About Liquidity Ratios Is

question 25

Multiple Choice

Which of the following statements about liquidity ratios is ?

• A)The higher the current ratio,the more likely a firm is able to pay its short-term obligations
• B)The lower the quick ratios 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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Free Rider

An individual who benefits from resources, goods, or services without paying for them, relying on others to bear the cost.

Fundraising Efforts

Activities or strategies implemented to gather financial support for a particular cause or project.

Common Resource

A type of good that is accessible to all members of society but has limited availability, leading to potential overuse or depletion.

Admittance Fee

A charge for entering a place or participating in an event, often used in contexts like museums, parks, or exhibitions.