Which of the following is false?
A)The cash ratio is the least stringent but most reliable test of liquidity.
B)A company with a high level of inventory will have a quick ratio significantly lower than its current ratio.
C)A current ratio that is too high could indicate funds tied up in inventory and other working capital assets.
D)Analysts consider a current ratio of 2 to be financially conservative.

Question

Quizplus · Accepted Answer

The cash ratio is actually the most stringent and least liquid measure of liquidity, not the least stringent but most reliable. It only considers cash and cash equivalents against current liabilities, making it a strict test of liquidity.

Which of the Following Is False