The most common liquidity ratio is current assets to current liabilities, which is called the
A) Debt-equity ratio.
B) Current ratio.
C) Profit loss ratio.
D) Return on investment ratio.
E) Stockholders' equity ratio.

Question

Quizplus · Accepted Answer

The most common liquidity ratio is current assets to current liabilities, called the current ratio or net working capital ratio. This ratio indicates the extent to which current assets can decline and still be adequate to pay current liabilities.

The Most Common Liquidity Ratio Is Current Assets to Current