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:

Serous Membrane

A thin, transparent tissue that lines certain internal cavities of the body, secreting a lubricating fluid.

Integument

The covering of the body, including skin, hair, feathers, scales, and nails, which serves as protection from external damage.

Transitional Epithelium

A type of epithelium that can stretch and contract, found lining organs such as the bladder.

Pseudostratified Epithelium

A type of tissue lining some air passages and glands, appearing layered due to cell nuclei at different levels, though each cell contacts the basement membrane.