The current ratio measures a firm's ability to meet

Question

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures a firm's ability to meet its short-term liabilities. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates a greater ability to meet short-term obligations. The other options mentioned, such as interest payments, long-term liabilities, all liabilities, and dividend payments are not directly related to the current ratio.

The Current Ratio Measures a Firm's Ability to Meet