The current ratio is a good proxy for a firm's:
A)Liquidity
B)Efficiency
C)Leverage
D)Profitability

Question

Quizplus · Accepted Answer

The current ratio measures a firm's ability to pay its short-term liabilities with its short-term assets. It is a measure of liquidity, which refers to a company's ability to meet its short-term obligations. The higher the current ratio, the more liquid the company is and the better able it is to meet its short-term obligations.

The Current Ratio Is a Good Proxy for a Firm's