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Lyndsay Wilson
on Oct 15, 2024

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Current assets divided by current liabilities is the:

A) Current ratio.
B) Quick ratio.
C) Debt ratio.
D) Liquidity ratio.
E) Solvency ratio.

Current Ratio

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

Current Assets

Current assets are those assets of a company that are expected to be sold, consumed, or converted into cash within one year or within the business's normal operating cycle.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business, which require the use of current assets or the creation of other current liabilities to settle.

  • Analyze financial condition through the computation and assessment of ratios such as the acid-test ratio, current ratio, and accounts receivable turnover.
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Ogechi OparnozieOct 21, 2024
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