A current ratio of 1.5 times would mean that the business has 1.5 times more assets than liabilities.

Current Ratio

A liquidity ratio measuring a company's ability to pay short-term obligations with its current assets.

Business Assets

Resources owned by a business that have economic value and can be used to generate income or provide future benefits.

Liabilities

Financial obligations or debts that a company owes to external parties, which need to be settled over time.

Acquire the ability to compute and comprehend the importance of liquidity ratios such as current and quick ratios.
Acknowledge the criticality of keeping adequate liquidity and asset administration for operational prowess.

Verified Answer

Devon WagnerNov 19, 2024

Final Answer:

Learning Objectives

Acquire the ability to compute and comprehend the importance of liquidity ratios such as current and quick ratios.
Acknowledge the criticality of keeping adequate liquidity and asset administration for operational prowess.