The Current Ratio

question 5

Multiple Choice

The current ratio:

• A) Is current assets divided by current liabilities.
• B) Helps to assess a company's ability to pay its debts in the near future.
• C) Reveals problems in a business if it is less than 1.
• D) Is current assets divided by current liabilities and helps to assess a company's ability to pay its debts in the near future.
• E) All of these answers are correct.

---

Definitions:

Positive Land Rent

The income received by landowners for the use of their land, typically due to the land's desirable location or fertility, which generates a return above the minimum needed to bring the land into production.

Values

The importance or worth that people attach to different things, ranging from material goods to principles and ethical standards.

Acres

A measurement unit used primarily in the United States, equal to 43,560 square feet, often used to describe the size of land.

Allocation of Land

The process of distributing land resources among competing uses or users according to certain criteria, policies, or plans.