Ruth wants to analyze the organization's ability to meet its current debt obligations.Which of the following ratios is most helpful to Ruth in analyzing this?
A) inventory turnover ratio
B) return on investment ratio
C) current ratio
D) total asset turnover ratio

Question

Quizplus · Accepted Answer

The current ratio is the ratio of current assets to current liabilities and provides insight into a company's ability to meet its short-term debt obligations. A higher current ratio indicates that a company has more current assets relative to its current liabilities and therefore is in a better position to meet its debt obligations.

Ruth Wants to Analyze the Organization's Ability to Meet Its