The current ratio is more useful than working capital in making comparisons across companies.

Question

Quizplus · Accepted Answer

The current ratio is a more standardized measure than working capital, as it is a ratio of current assets to current liabilities. Working capital can vary greatly between different companies and industries, making it less useful for comparisons. Additionally, the current ratio takes into account both the liquidity of current assets and the timing of current liabilities, providing a more complete picture of a company's short-term financial health.

The Current Ratio Is More Useful Than Working Capital in Making