Which of the following measures a company's ability to pay its current liabilities?
A) earnings per share
B) inventory turnover
C) current ratio
D) number of times interest charges earned

Question

Quizplus · Accepted Answer

Current ratio measures a company's ability to pay its current liabilities with its current assets. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates that the company is better equipped to meet its short-term obligations.

Which of the Following Measures a Company's Ability to Pay