The ________ ratio is a measure of the small company's ability to pay current debts from current assets and is the liquidity ratio most commonly used as a measure of short-term solvency.
A)quick
B)debt-to-net worth
C)current
D)debt-to-assets

Question

Quizplus · Accepted Answer

The current ratio is calculated as current assets divided by current liabilities. It indicates whether a company can pay off its short-term liabilities using its short-term assets. This ratio is commonly used as a measure of short-term solvency or liquidity because it shows the company's ability to meet its current obligations.

The ________ Ratio Is a Measure of the Small Company's