The Current Ratio Indicates a Firm's Ability to Meet Its

question 142

Multiple Choice

The current ratio indicates a firm's ability to meet its short-term obligations.Analysts prefer a current ratio that at least exceeds

• A).5
• B)1.0
• C)2.0
• D)3.0
• E)4.0

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Definitions:

Financial Disclosure Requirements

Regulations and standards mandating companies to disclose certain financial and operational information, ensuring transparency and aiding stakeholders in informed decision-making.

Financial Instruments

Contracts that give rise to both a financial asset to one party and a financial liability or equity instrument to another party, including stocks, bonds, and derivatives.

Accounting Trends

Emerging patterns or changes in accounting practices, including the adoption of new standards, technologies, or methodologies in financial reporting.

Report Form

A format of presenting a balance sheet where the assets are listed above the liabilities and equity sections, providing a vertical snapshot of a company's financial position.