Which ratio would tell you if the company has sufficient short-term assets to pay its short-term liabilities?
A) leverage ratio
B) profitability ratio
C) debt-to-equity ratio
D) current ratio

Question

Quizplus · Accepted Answer

The current ratio compares a company's current assets to its current liabilities, providing insight into the company's ability to pay off its short-term debts. A higher current ratio indicates that a company has more short-term assets to cover its short-term liabilities, thus indicating a better financial position.

Which Ratio Would Tell You If the Company Has Sufficient