Which of the Following Does the Current Ratio Measure

question 127

Multiple Choice

Which of the following does the current ratio measure?

• A) The company's overall ability to pay liabilities
• B) The company's ability to pay current liabilities with current assets
• C) The proportion of the company's assets that are financed with debt
• D) The company's rate of cash flow

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Definitions:

Coniferous Trees

Trees that bear cones and evergreen needle-like or scale-like leaves, including pines, spruces, and firs.

Fertile Soil

Soil rich in nutrients and organic matter, capable of supporting vigorous plant growth.

Temperate Grasslands

Ecosystems characterized by vast open areas with relatively few trees, experiencing moderate rainfall and seasonal temperature variations, often used for grazing and agriculture.

Tropical Deciduous Forest

A biome classified by trees that shed their leaves in dry seasons, found in tropical regions with seasonal rainfall.