Katrina Aldridge
The yearly auditing review of Pilgrim Industries is scheduled for next month. Katrina Aldridge is preparing for that audit and is also preparing her budget for the coming year.
-Katrina has also requested that the financial ratios be calculated and analyzed for her. Which of the following ratios will give her the best information for evaluating liquidity?
A) Profit margin on sales
B) Current ratio
C) Conversion ratio
D) Return on assets
E) Debt ratio

Question

Quizplus · Accepted Answer

The current ratio provides information about the company's ability to pay its current liabilities with its current assets. This helps evaluate the company's liquidity, as a ratio of 1 or higher indicates the company has enough current assets to cover its current liabilities.

Katrina Aldridge the Yearly Auditing Review of Pilgrim Industries Is Scheduled for Scheduled