Elaine wants to analyze her company's ability to meet its current debt obligations. Which one of the following ratios is most helpful to Ruth in analyzing this?

Question

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The current ratio is the ratio of current assets to current liabilities, and it measures the ability of a company to meet its short-term debt obligations. A higher current ratio indicates a better ability to meet these obligations. Therefore, the current ratio is the most helpful ratio for Elaine to analyze her company's ability to meet its current debt obligations. The other ratios listed are not directly related to a company's ability to meet its debt obligations.

Elaine Wants to Analyze Her Company's Ability to Meet Its