Which type of financial ratio is computed by dividing the organization's present assets by its present liabilities?
A) Inventory turnover ratio
B) Days sales outstanding ratio
C) Profit ratio
D) Current ratio
E) Debt-to-assets ratio

Question

Quizplus · Accepted Answer

The current ratio (current assets divided by current liabilities) tells managers whether they have the resources available to meet the claims of short-term creditors.

Which Type of Financial Ratio Is Computed by Dividing the Organization's