The current ratio concept suggests that it is a measure of the cash required to fund all debt coming due within 12 months with consideration of all of the firm's existing economic resources.

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The current ratio measures a company's ability to meet its short-term obligations by comparing its current assets to its current liabilities. It takes into consideration all of the firm's existing economic resources, including cash, accounts receivable, and inventory, among other things.

The Current Ratio Concept Suggests That It Is a Measure