Which of the following statements about the current ratio is not correct?
A)When making comparisons across companies,it's far easier to express the relationship as a ratio.
B)The current ratio is used to evaluate a company's ability to pay current obligations.
C)Having more current assets than current liabilities will yield a current ratio less than 1.0.
D)A high current ratio suggests good liquidity.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities.If current assets exceed current liabilities,the ratio will be greater than (rather than less)than 1.0.

Which of the Following Statements About the Current Ratio Is