Which of the ratios listed helps to indicate whether a company has enough short-term assets to cover its short-term liabilities?
A) Current ratio
B) Profit margin
C) Debt-to-equity
D) Return on assets

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to meet short-term obligations with short-term assets. A higher current ratio indicates that a company has more short-term assets relative to short-term liabilities and therefore a higher ability to cover its short-term obligations.

Which of the Ratios Listed Helps to Indicate Whether a Company