Grace has just reviewed a number of indicators of financial control for her firm. One that worries her indicates that the company may soon have trouble making loan payments and clearing its current accounts receivables. In this case, Grace is concerned about the _____ ratio.
A)profit and loss
B)profitability
C)leverage
D)net working capital
E)return on investment

Question

Quizplus · Accepted Answer

The most common liquidity ratio is current assets to current liabilities, which is 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.

Grace Has Just Reviewed a Number of Indicators of Financial