The relationship between current assets and current liabilities is referred to as the:

Question

Quizplus · Accepted Answer

The relationship between current assets and current liabilities is known as the current ratio. It is used to determine a company's ability to pay its short-term obligations. The formula for calculating the current ratio is current assets divided by current liabilities. A higher current ratio indicates that the company has more current assets to cover its current liabilities, which is generally considered to be a good sign for investors and creditors.

The Relationship Between Current Assets and Current Liabilities Is Referred