The Current Ratio Is Irrelevant in Liquidity Analysis for Service

question 5

True/False

The current ratio is irrelevant in liquidity analysis for service companies because they do not have inventories among their current assets.

---

Definitions:

Buffer

A protective barrier or amount of leeway that allows for the absorption of shocks, errors, or unforeseen circumstances in various contexts.

Identifies

The action of recognizing and naming someone or something as being a particular person or thing.

Third Person

A point of view in writing or storytelling where the narrator refers to all characters with third-person pronouns such as "he," "she," "it," or "they."

Second Person

A narrative perspective using "you," which directly addresses the reader or audience in a piece of writing or speech.