A current ratio below 1.0 is a sign of financial strength for a company.

Question

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A current ratio below 1.0 typically indicates that a company may have difficulty meeting its short-term financial obligations, which is generally seen as a sign of weakness rather than strength. Generally, a current ratio above 1.0 is considered more favorable, as it indicates that a company has sufficient current assets to cover its current liabilities.

A Current Ratio Below 1