Asked by
Gracie Smithee
on Dec 16, 2024
Verified
If equal amounts are added to the numerator and the denominator of the current ratio the ratio will always
A) increase.
B) decrease.
C) stay the same.
D) equal zero.
Current Ratio
A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets relative to its current liabilities.
Numerator
The top number in a fraction or ratio that represents the part of the whole being considered.
Denominator
In mathematics, the denominator is the bottom part of a fraction that indicates how many equal parts the whole is divided into.
- Understand the concept of financial ratios and their relevance to a company's financial health.
- Understand the use of profitability ratios (profit margin, return on assets) in assessing overall company performance.
Verified Answer
AB
Learning Objectives
- Understand the concept of financial ratios and their relevance to a company's financial health.
- Understand the use of profitability ratios (profit margin, return on assets) in assessing overall company performance.
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