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    Question

    Which ratio measures a company's ability to meet its

    short-term obligations?
    A Debt-Equity Ratio Correct Answer Incorrect Answer
    B Current Ratio Correct Answer Incorrect Answer
    C Return on Equity Correct Answer Incorrect Answer
    D Gross Profit Ratio Correct Answer Incorrect Answer

    Solution

    Current Ratio = Current Assets ÷ Current Liabilities. It indicates the company's liquidity position and ability to pay short-term debts.

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