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

Question

Quizplus · Accepted Answer

An increase in the current ratio indicates that the company has a higher proportion of current assets to current liabilities. This means that the company has more liquid assets to pay off short-term debts, indicating that the company will be better able to meet short-term debt obligations.

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