A Very Low Cash Ratio Does Not Send a Strong

question 79

True/False

A very low cash ratio does not send a strong message to investors and creditors that the company has the ability to repay its short-term debt.

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Definitions:

Market Failure

When the free market's distribution of goods and services is inefficient, it typically results in a reduction of societal welfare.

Inefficient Allocation

A situation where resources are not used in the best possible way, often leading to waste or unmet needs.

Negative Externality

An undesirable outcome of an economic activity that affects third parties who did not choose to incur that cost or benefit.

Air Pollution

The presence of substances in the atmosphere that are harmful to human health, the environment or cause climate change.