A Current Ratio of 2

question 99

Multiple Choice

A current ratio of 2.00 indicates that the company has $2 of:

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

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Definitions:

Credit Rating

An assessment of the creditworthiness of a borrower in terms of their ability to repay a loan or debt.

Interest Rate

The percentage of principal charged by the lender for the use of its money or the return earned on deposited funds.

Municipal Bonds

Debt securities issued by municipalities to finance public projects, such as building schools or highways, generally offering tax-exempt interest payments to investors.

Tax Advantage

Financial benefits that accrue due to preferential tax treatment of certain investments or transactions.