The current ratio measures which of the following:

Question

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures a company's ability to pay its current liabilities with its current assets. It is calculated by dividing current assets by current liabilities. A ratio of 1 or higher indicates that a company has enough current assets to cover its current liabilities, while a ratio of less than 1 suggests that a company may have difficulty meeting its short-term obligations. Therefore, option A is the correct answer.

The Current Ratio Measures Which of the Following