Which of the following would you calculate if you were concerned about your financial resources with regards to unplanned money emergencies?
A)Liability ratio
B)Debt ratio
C)Long-term debt coverage ratio
D)Current ratio
E)None of the above

Question

Quizplus · Accepted Answer

The current ratio is a measure of a company's ability to pay off short-term liabilities with current assets. In personal finance, it can be applied to assess one's ability to handle unexpected expenses. Having a higher current ratio indicates that one has enough liquid assets to cover short-term obligations and potential emergencies. Therefore, it is a suitable metric for individuals to calculate if they are concerned about their financial resources with regards to unplanned money emergencies. The liability ratio, debt ratio, and long-term debt coverage ratio are more relevant in measuring one's overall financial leverage and sustainability, which are less relevant in the context of emergency funds.

Which of the Following Would You Calculate If You Were