The current ratio is more useful than working capital in comparing across companies or with industry averages.

Name: The current ratio is more useful than working capital in comparing across companies or with industry averages.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The current ratio standardizes the comparison by relating current assets to current liabilities, making it easier to compare across companies or with industry averages, unlike working capital which is an absolute number and can vary greatly in scale between companies.

The Current Ratio Is More Useful Than Working Capital in Comparing