A company that has a current ratio less than one cannot cover:
A)current liabilities with its current cash flow.
B)current expenses with its current sales revenue.
C)expenses with its current revenues.
D)current liabilities with its current assets.

Question

Quizplus · Accepted Answer

Current ratio = Current assets ÷ Current liabilities
If this ratio is less than 1,current liabilities are greater than current assets.

A Company That Has a Current Ratio Less Than One