One problem with the current ratio is that some assets may be less liquid than others.

Question

Quizplus · Accepted Answer

The current ratio only takes into account current assets which are assumed to be highly liquid, but some current assets may be less liquid than others. For example, inventory may take a longer time to convert to cash than cash and marketable securities. This can impact the accuracy of the current ratio in measuring a company's liquidity.

One Problem with the Current Ratio Is That Some Assets