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

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to pay its current liabilities with its current assets. Therefore, by calculating the current ratio, Alex can ensure that he has enough liquid assets to pay his current bills. A higher current ratio indicates that there are more current assets available to pay off current liabilities, which would mean that the company is better positioned to meet its short-term obligations.

Alex Wants to Make Sure He Has Enough Liquid Assets