The _____ shows how easily a company can pay its short-term obligations.
A) current ratio
B) equity ratio
C) working capital
D) net sales

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to pay its short-term debts and obligations with its current assets. It is calculated by dividing current assets by current liabilities. A higher current ratio indicates a company is more capable of meeting its short-term financial obligations. Therefore, current ratio is the best choice for the given question.

The _____ Shows How Easily a Company Can Pay Its