Which of the following signifies that a company may be unable to pay its current liabilities if they suddenly become due?
A)High current ratio
B)Low gross profit percentage
C)High earnings per share
D)Low current ratio

Question

Quizplus · Accepted Answer

A low current ratio indicates that a company may have difficulty paying its current liabilities if they suddenly become due. The current ratio is calculated by dividing the company's current assets by its current liabilities. A ratio of less than 1 indicates that the company may not have enough current assets to cover its current liabilities.

Which of the Following Signifies That a Company May Be