If the Only Information You Are Given About Ryan Corporation

question 48

Multiple Choice

If the only information you are given about Ryan Corporation, a large public company in business for many years, is that it has a current ratio of 2.9, what could you infer from this?

• A) It can meet the short-term obligations without any difficulty.
• B) You could determine that Ryan has a liquidity problem because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio.
• C) Nothing, you would also need the current ratio's from the last few years of the S&P 500 Index.
• D) You could determine that Ryan has an activity problem because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio.