All other things being equal, a higher current ratio indicates that:
A) the company has excess cash
B) the company's long- term debt is due soon
C) a customer is likely to pay in full and on time
D) a creditor is likely to be paid in full and on time

Question

Quizplus · Accepted Answer

A higher current ratio indicates that a company has more current assets relative to its current liabilities, suggesting it is more capable of paying off its short-term obligations, making it more likely that creditors will be paid in full and on time.

All Other Things Being Equal, a Higher Current Ratio Indicates