Which ratio is an indication of whether an organization can meet its current liabilities―those due within a year―with its current assets?
A) Current ratio
B) Quick ratio
C) Total asset turnover ratio
D) Inventory turnover ratio
E) Debt ratio

Question

Quizplus · Accepted Answer

The current ratio is the ratio of a company's current assets to its current liabilities, which indicates the company's ability to pay its short-term obligations. A ratio of more than 1:1 indicates that the company has enough current assets to cover its current liabilities.

Which Ratio Is an Indication of Whether an Organization Can