________ ratio is a liquidity ratio that indicates the extent to which short-term assets can decline and still be adequate to pay short-term liabilities.
A)Debt-equity
B)Current
C)Profitability
D)Return on investment
E)Stockholders' equity

Question

Quizplus · Accepted Answer

The current ratio measures the company's ability to use its current assets to satisfy its current liabilities. In other words, it indicates how well a company can pay off its short-term debts with its short-term assets. Therefore, it helps in identifying whether the company is capable of meeting its short-term obligations, even in cases of a sudden loss in short-term assets.

________ Ratio Is a Liquidity Ratio That Indicates the Extent