The higher the ____, the more liquid the company is and the more easily these assets can be converted to cash to pay off short-term obligations.
A)return on investment
B)inventory turnover
C)current ratio
D)profit margin
E)income statement

Question

The higher the ____, the more liquid the company is and the more easily these assets can be converted to cash to pay off short-term obligations. ​
A)return on investment
B)inventory turnover
C)current ratio
D)profit margin
E)income statement

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It is calculated by dividing current assets by current liabilities, indicating how well a company can cover its short-term debts with its short-term assets.

The Higher the ____, the More Liquid the Company Is