How are current liabilities used in financial

analysis?

A To evaluate a company’s ability to pay its long-term debt Correct Answer Incorrect Answer

B To evaluate a company’s profitability Correct Answer Incorrect Answer

C To evaluate a company’s liquidity Correct Answer Incorrect Answer

D To evaluate a company’s solvency Correct Answer Incorrect Answer

Solution

Current liabilities are used in financial analysis to evaluate a company’s liquidity, or its ability to meet short-term financial obligations.

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