This type of ratio is used to determine if a company has the resources available to meet the claims of short-term creditors:
A)ROI
B)day sales outstanding
C)quick ratio
D)inventory turnover
E)current ratio

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to meet short-term obligations by comparing its current assets to its current liabilities. Short-term creditors, such as suppliers and lenders, are interested in this ratio because it indicates whether a company has enough resources to pay off its debts as they come due. A higher current ratio indicates a stronger ability to meet short-term obligations, while a lower current ratio may suggest potential liquidity issues. Therefore, the current ratio is the best choice for this scenario.

This Type of Ratio Is Used to Determine If a Company