The most important information needed to determine if companies can pay their current obligations is the
A)profit for this year.
B)projected profit for next year.
C)relationship between current assets and current liabilities.
D)relationship between current and non-current liabilities.

Question

Quizplus · Accepted Answer

The relationship between current assets and current liabilities, also known as the current ratio, is the most important information to determine if a company can pay its current obligations. This ratio shows whether a company has enough current assets to cover its current liabilities. A current ratio of 1 or higher generally indicates that the company can meet its current obligations.

The Most Important Information Needed to Determine If Companies Can