_____ = Current Assets/Current Liabilities
A) Acid Test
B) Current Ratio
C) Debt Ratio
D) Assets Turnover ratio
E) Net Current Margin

Question

Quizplus · Accepted Answer

The formula given in the question is that of the current ratio which is used to measure a company's ability to pay off its short-term obligations. It is calculated by dividing current assets by current liabilities. The current ratio indicates whether a company has enough short-term assets to cover its short-term debt. A current ratio of 1 or higher is considered good, indicating that a company can pay off its current liabilities with its current assets.