A weakness of the current ratio is
A) the difficulty of the calculation.
B) it uses year-end balances of current asset and current liability accounts.
C) it is rarely used by sophisticated analysts.
D) it can be expressed as a percentage, as a rate, or as a proportion.

Question

Quizplus · Accepted Answer

The weakness of the current ratio is that it uses year-end balances of current asset and current liability accounts, which may not accurately reflect the company's liquidity position throughout the year.

A Weakness of the Current Ratio Is