Which of the following statements is INCORRECT?
A) If the current ratio is too high the company may not be managing its assets effectively.
B) If the current ratio is too high the company overly high levels of inventory.
C) If the current ratio is too high the company may have too much cash on hand.
D) If the current ratio is too high the company may have an insignificant amount of receivables.

Question

Quizplus · Accepted Answer

A high current ratio indicates that a company has more current assets relative to its current liabilities, which could mean excess cash, inventory, or inefficient asset management, but not necessarily an insignificant amount of receivables.

Which of the Following Statements Is INCORRECT