Which of the following signifies that a company may be unable to pay its current liabilities if they suddenly come due?
A) Low current ratio
B) High current ratio
C) High earnings per share
D) Low gross profit percentage

Question

Quizplus · Accepted Answer

A low current ratio indicates that a company has a small cushion of current assets to cover its current liabilities if they suddenly come due. Therefore, it may be unable to pay its current liabilities if they suddenly come due.

Which of the Following Signifies That a Company May Be