Asked by
Andreas Diacandreou
on Nov 13, 2024
Verified
The current ratio may also be referred to as the
A) short run ratio.
B) acid-test ratio.
C) working capital ratio.
D) contemporary ratio.
Working Capital Ratio
A liquidity ratio that measures a company's ability to pay off its current liabilities with its current assets.
Acid-test Ratio
The acid-test ratio, also known as the quick ratio, measures a company's ability to pay its current liabilities without needing to sell inventory.
- Gain an understanding of the role and importance of financial ratios in evaluating the financial wellness of a company.
- Master the calculation of current and quick (acid-test) ratios to assess a company's short-term liquidity.
Verified Answer
CS
Learning Objectives
- Gain an understanding of the role and importance of financial ratios in evaluating the financial wellness of a company.
- Master the calculation of current and quick (acid-test) ratios to assess a company's short-term liquidity.