The cash ratios of four companies are listed below. $$\begin{array} { | l | c | }
\hline \text { COMPANY } & \text { CASH RATIO } \
\hline \text { Juan Corp. } & 0.26 \
\hline \text { Rose Inc. } & 0.15 \
\hline \text { Freelance Inc. } & 0.18 \
\hline \text { Pioneer Corp. } & 0.27 \
\hline
\end{array}$$ Which company has the maximum ability to repay its short-term debts?

Question

The cash ratios of four companies are listed below. $$\begin{array} { | l | c | } 
\hline \text { COMPANY } & \text { CASH RATIO } \
\hline \text { Juan Corp. } & 0.26 \
\hline \text { Rose Inc. } & 0.15 \
\hline \text { Freelance Inc. } & 0.18 \
\hline \text { Pioneer Corp. } & 0.27 \
\hline
\end{array}$$ Which company has the maximum ability to repay its short-term debts?

Quizplus · Accepted Answer

The cash ratio measures a company's ability to repay its short-term debts using only its cash and cash equivalents. A higher cash ratio indicates a better ability to repay short-term debts. Among the four companies listed, Pioneer Corp. has the highest cash ratio of 0.27, indicating that it has the maximum ability to repay its short-term debts.

The Cash Ratios of Four Companies Are Listed Below Which Company Has the Maximum Ability to Repay Its Short-Term