The current ratio
A)is calculated by dividing total assets by total liabilities.
B)takes into account the composition of current assets.
C)takes into account the composition of current assets and current liabilities.
D)is calculated by dividing current assets by current liabilities.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities, which measures a company's ability to pay off its short-term liabilities with its short-term assets.

The Current Ratio