A Current Ratio Above 2

question 22

Multiple Choice

A current ratio above 2.00 would indicate that a:

• A) company has $2 of current liabilities for every $1 of current assets.
• B) company has $2 of total assets for every $1 of current liabilities.
• C) company has $2 of current assets for every $1 of current liabilities.
• D) company has $2 of total assets for every dollar of current assets.

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Definitions:

Total Fixed Cost

the sum of all costs that remain constant regardless of the level of production or business activity.

Weekly Cost

Expenses calculated on a weekly basis, tracking the regular outflow of cash for operations or living expenses.

Total Costs

The sum of all expenses incurred by a business in the production of goods or services, including fixed and variable costs.

Output

The amount of goods or services produced by a company, industry, or economy within a specified period.