A company has a current ratio of 0.85 to 1.What should a manager in the company worry about?
A)The company has too many assets and is not using them efficiently.
B)The company has too much inventory.
C)The company may start to have trouble paying salaries.
D)The company is paying salaries that are too high.

Question

Quizplus · Accepted Answer

A current ratio of 0.85 to 1 indicates that the company may have difficulty meeting its short-term financial obligations. This suggests that the company may struggle to pay its salaries or other short-term obligations. Therefore, the manager should be worried about the company's ability to meet its financial obligations.

A Company Has a Current Ratio of 0