From the list below,select the ratio(s)that help in the analysis of working capital:
A) current ratio
B) quick ratio
C) debt ratio
D) current ratio and quick ratio

Question

Quizplus · Accepted Answer

The current ratio and quick ratio both help in analyzing the working capital of a company. The current ratio measures the ability of a company to pay its short-term liabilities using its current assets, while the quick ratio measures the ability of a company to pay its immediate debts using its liquid assets. Therefore, analyzing both ratios provides a better understanding of a company's financial health in terms of its working capital. The debt ratio, on the other hand, measures a company's leverage and does not directly relate to working capital analysis.

From the List Below,select the Ratio(s)that Help in the Analysis