Which of the Following Statements About the Current Ratio Is

question 65

Multiple Choice

Which of the following statements about the current ratio is NOT true?

• A) The current ratio is also known as the working capital ratio.
• B) The interpretation of the current ratio depends very much on the nature of the enterprise and its way of doing business.
• C) A ratio greater than 2:1 is a guarantee of survival.
• D) A positive working capital indicates that the business has sufficient funds to pay its commitments.

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