Question

    Current ratio is equal

    to
    A Current Assets / Current Liabilities Correct Answer Incorrect Answer
    B Total assets/ total liabilities Correct Answer Incorrect Answer
    C Total liabilities / total assets Correct Answer Incorrect Answer
    D Total (Assets-liabilities)/ total liabilities Correct Answer Incorrect Answer
    E Total (liabilities- assets)/ total assets Correct Answer Incorrect Answer

    Solution

    The current ratio is a liquidity ratio that measures a company's ability to pay off its short-term obligations with its short-term assets. It is calculated as Current Assets / Current Liabilities, and a ratio above 1 indicates good liquidity.

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