A Weakness of the Current Ratio Is

question 161

Multiple Choice

A weakness of the current ratio is

• A) the difficulty of the calculation.
• B) that it doesn't take into account the composition of the current assets.
• C) that it is rarely used by sophisticated analysts.
• D) that it can be expressed as a percentage as a rate or as a proportion.

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Definitions:

Total Variation

The overall measure of variability or dispersion within a dataset.

Independent Variables

Variables in an experiment or statistical model that are manipulated or categorized to determine their effect on dependent variables.

Observations

Data collected during an experiment or research, representing values or occurrences recorded by the researcher.

SSR

Sum of Squares due to Regression, a statistical measure used to assess the explanatory power of variables in a regression model.