The current ratio is useful in determining a company's ability to pay obligations when they become due.

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The current ratio is a liquidity ratio that measures a company's ability to pay off its short-term liabilities with its current assets. A higher current ratio indicates that a company has more current assets relative to its current liabilities, which means it is better able to pay off its obligations when they become due. Therefore, the current ratio is a useful tool for assessing a company's short-term solvency and financial health.

The Current Ratio Is Useful in Determining a Company's Ability