Assume That a Firm Has Total Assets of $1,000,000 and Current

question 205

Multiple Choice

Assume that a firm has total assets of $1,000,000 and current liabilities of $700,000. Eighty percent of the assets are current assets. An analyst reviewing this firm's current ratio would most likely conclude that the:

• A) current ratio is extremely strong.
• B) firm should have little trouble paying its current debt.
• C) firm may experience some trouble paying its debts.
• D) firm will definitely experience trouble paying its debts.

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Definitions:

Social Equality

The condition in which all individuals within a society have the same status in certain respects, including civil rights, freedom of speech, property rights, and equal access to social goods and services.

Unalienable Rights

Fundamental rights that cannot be surrendered or transferred from one person to another, often referenced in the context of the United States Declaration of Independence.

British Government

The central government of the United Kingdom, consisting of the Parliament, the Prime Minister, and the monarch, responsible for creating and implementing policy and law.

Articles of Confederation

The first written constitution of the United States, in effect from 1781 to 1789, before being replaced by the current U.S. Constitution due to its weaknesses.