The current ratio is a superior tool to cash flow projections and pro forma financial statements in assessing short-term liquidity.

Question

Quizplus · Accepted Answer

While the current ratio is a useful tool in assessing short-term liquidity, it should not be considered superior to cash flow projections or pro forma financial statements. These other methods provide a more detailed and forward-looking analysis of a company's cash flow and financial health.

The Current Ratio Is a Superior Tool to Cash Flow