All of the Following Regarding the Current Ratio Are True

question 50

Multiple Choice

All of the following regarding the current ratio are true except:

• A) Current ratio is calculated by dividing current assets by current liabilities.
• B) Current ratio can reveal challenges in covering short-term obligations if it is less than 1.
• C) Current ratio can affect a creditor's decision about whether to lend money to a company.
• D) Current ratio does not affect a creditor's decision on whether to allow a company to buy on credit.
• E) Current ratio helps to assess a company's ability to pay its debts in the near future.

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Definitions:

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The ability to influence others towards the achievement of long-term organizational goals through strategic vision and action.

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A group of non-vascular plants belonging to the division Marchantiophyta, characterized by flat green thalli and often found in moist, shady environments.

Mosses

Non-vascular, small, green plants that typically form dense green clumps or mats, often found in damp or shady locations.

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A group of trees that bear cones and evergreen needles or scale-like leaves, including pines, spruces, and firs.