Elaine wants to analyze her company's ability to meet its current debt obligations.Which of the following ratios is most helpful to Ruth in analyzing this?

Question

Quizplus · Accepted Answer

The current ratio is the most helpful ratio for analyzing a company's ability to meet its current debt obligations. This ratio measures a company's ability to pay off its current liabilities with its current assets, which include cash, accounts receivable, and inventory. A higher current ratio indicates that the company has sufficient current assets to meet its current liabilities, indicating a stronger ability to pay off its debts in the near term.

Elaine Wants to Analyze Her Company's Ability to Meet Its