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.

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Definitions:

Predictability

The ability to be anticipated or to accurately forecast future events or behaviors based on current knowledge or patterns.

Regularity

The quality or state of being consistent or uniform in procedure, form, or arrangement; often referring to patterns or rhythms in nature or behavior.

Actively Playful

Engaging in activity with energy and enthusiasm, often referring to the lively and spirited manner in children's play.

Noisy

describes environments or sounds that are loud and disruptive, making it hard to hear or concentrate.