The current ratio provides a test of a company's ability to meet its short-term obligations.

Name: The current ratio provides a test of a company's ability to meet its short-term obligations.
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The current ratio measures a company's ability to meet its short-term obligations, specifically by comparing its current assets to its current liabilities. A higher current ratio indicates a stronger ability to pay off short-term debts.

The Current Ratio Provides a Test of a Company's Ability