What does the current ratio measure?
A)use of assets.
B)profitability.
C)investments.
D)liquidity.

Question

Quizplus · Accepted Answer

The current ratio measures a company's ability to pay its short-term debts and obligations, and is therefore a measure of liquidity. It is calculated by dividing a company's current assets by its current liabilities. The higher the current ratio, the more capable the company is of paying off its short-term debts using its current assets.

What Does the Current Ratio Measure