When Analyzing a Company's Current Ratio

question 44

Multiple Choice

When analyzing a company's current ratio:

• A)the current ratio is equal to total current assets divided by total liabilities.
• B)most successful businesses operate with current ratios between 0.1 and 0.5.
• C)a current ratio of less than 1.00 means that current liabilities exceed current assets.
• D)the industry the company is in should not be considered.

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Definitions:

Creativity

The use of imagination or original ideas to create something; inventiveness.

Uncertain Conditions

Situations where the outcomes or future states are not predictable due to a lack of information or inherent variability in the environment.

Entrepreneurship

The act of creating, developing, and managing a business venture along with its financial risks in order to profit and innovate within the market.

Quickly Sense

The ability to rapidly perceive or deduce information from a given situation or environment.