The current ratio:
A) Analyzes long-term financial viability.
B) Will normally have a lower value than the quick ratio.
C) Is a measure of short-term liquidity.
D) Considers all debt obligations of a firm.
E) Indicates the turnover rate of a firm's accounts receivable.

Question

Quizplus · Accepted Answer

The current ratio is a measure of a company's ability to pay off its short-term liabilities with its short-term assets, thus it assesses short-term liquidity.

The Current Ratio