Current ratio (current assets divided by current liabilities) is a type of _____ financial measure.
A)profit ratio
B)operating ratio
C)liquidity ratio
D)leverage ratio
E)activity ratio

Question

Quizplus · Accepted Answer

Liquidity ratios measure how well managers have protected organizational resources to be able to meet short-term obligations.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.

Current Ratio (Current Assets Divided by Current Liabilities) Is a Type