The current ratio measures the ________.
A)amount of revenue recognized in the current accounting period
B)liquidity of a company
C)profitability of a company
D)financial risk of a company

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to pay its short-term liabilities with its current assets. It is a measure of liquidity, which refers to the ease with which a company can convert its assets into cash to meet its obligations. The other options - amount of revenue recognized in the current accounting period, profitability of a company, and financial risk of a company - are not directly related to the current ratio.

The Current Ratio Measures the ________