The current ratio is not the most stringent measure of liquidity, because it ____.
A) is difficult to calculate
B) includes some items, such as inventory, that may not be readily liquid
C) requires many years of past data
D) includes many non-current items in its calculation

Question

Quizplus · Accepted Answer

The current ratio includes items such as inventory that may not be readily liquid. Therefore, it is not the most stringent measure of liquidity.

The Current Ratio Is Not the Most Stringent Measure of Liquidity