Which of the Following Is TRUE of the Current Ratio

question 88

Multiple Choice

Which of the following is TRUE of the current ratio?

• A)The more predictable a firm's cash flows,the higher the acceptable current ratio.
• B)A higher current ratio indicates a higher return on equity.
• C)The more predictable a firm's current ratio,the higher the current liabilities.
• D)A higher current ratio indicates a greater degree of liquidity.

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Definitions:

Theory Construction

is the process of developing a systematic framework of concepts and propositions intended to explain specific phenomena or guide research and practice.

Theory Theory

The Theory Theory is the idea that children attempt to understand the world by forming and testing theories about physical, biological, and social phenomena in a manner similar to scientists.

Interactions

Refers to the reciprocal action or influence between entities, such as chemicals, social agents, or environmental factors.

Cultural Context

The environment and factors that influence the values, practices, and communication of a particular group, including history, economy, social norms, and language.