The cash ratios of four companies are listed below. $$\begin{array} { | l | c | }
\hline \text { Company } & \text { Cash Ratio } \
\hline \text { Juan Corp. } & 0.25 \
\hline \text { Rose, Inc. } & 0.12 \
\hline \text { Freelance, Inc. } & 0.19 \
\hline \text { Pioneer Corp. } & 0.27 \
\hline
\end{array}$$ Which company has the maximum ability to repay its current liabilities?

Question

The cash ratios of four companies are listed below. $$\begin{array} { | l | c | } 
\hline \text { Company } & \text { Cash Ratio } \
\hline \text { Juan Corp. } & 0.25 \
\hline \text { Rose, Inc. } & 0.12 \
\hline \text { Freelance, Inc. } & 0.19 \
\hline \text { Pioneer Corp. } & 0.27 \
\hline
\end{array}$$ Which company has the maximum ability to repay its current liabilities?

Quizplus · Accepted Answer

The cash ratio measures a company's ability to cover its current liabilities with its cash and cash equivalents. The higher the ratio, the better the company's ability to repay its current liabilities. Pioneer Corp.'s cash ratio of 3.2 is the highest among the four companies listed, indicating that it has the maximum ability to repay its current liabilities.

The Cash Ratios of Four Companies Are Listed Below Which Company Has the Maximum Ability to Repay Its Current