Alex wants to make sure he has enough liquid assets to pay his current bills.To do this, he should calculate his business's:
A)debt ratio.
B)statement of cash flows.
C)current ratio.
D)asset turnover ratio.

Question

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures the ability of a business to pay its current liabilities with its current assets. By calculating his current ratio, Alex can determine if he has enough liquid assets (current assets) to cover his current bills (current liabilities). A current ratio of 1 or higher indicates that a business has enough current assets to pay off its current liabilities.

Alex Wants to Make Sure He Has Enough Liquid Assets