The current ratio measures:
A)the amount of total assets available to the business currently.
B)a company's ability to pay current liabilities with its total assets.
C)a company's ability to pay current liabilities with current assets.
D)a company's profitability during a particular period.

Question

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures a company's ability to pay off its current liabilities with its current assets. It is a measure of short-term financial health and provides insight into whether a company has enough cash or other assets to meet its short-term obligations. Therefore, choice C is the best answer.

The Current Ratio Measures