The Current Ratio Measures

question 134

Multiple Choice

The current ratio measures:

• A)the amount of total assets available to the business currently.
• B)a company's ability to pay current liabilities with its total assets.
• C)a company's ability to pay current liabilities with current assets.
• D)a company's profitability during a particular period.

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Definitions:

Payment Date

The date on which a dividend check is mailed.

Balance Sheet

A financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a basis for computing rates of return and evaluating its capital structure.

Cash Dividend

A payment made in cash to shareholders, typically distributed from a company's earnings.

Retained Earnings

The portion of a company's profit that is held or retained and saved for future use, investment, or debt repayment, instead of being paid out as dividends.