If all else is held equal, an increase in the current ratio of a company is generally considered to be an indication that:
A)the company will have increased difficulty meeting short-term obligations.
B)current liabilities have increased.
C)the company will be better able to meet short-term debt obligations.
D)current assets have decreased.

Question

Quizplus · Accepted Answer

An increase in the current ratio of a company means that its current assets have increased relative to its current liabilities. This suggests that the company will be better able to meet its short-term debt obligations.

If All Else Is Held Equal, an Increase in the Current