Management should usually strive to keep the cash ratio high.

Name: Management should usually strive to keep the cash ratio high.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The cash ratio is a liquidity measure that shows a company's ability to cover its short-term obligations with its cash and cash equivalents. While having some liquidity is important, a very high cash ratio might indicate that the company is not efficiently using its cash resources to invest in growth opportunities or other assets that could generate higher returns.

Management Should Usually Strive to Keep the Cash Ratio High