The current ratio is also known as the:
A) working capital ratio.
B) cash flow ratio.
C) quick ratio.
D) acid-test ratio.

Question

Quizplus · Accepted Answer

The current ratio is a liquidity ratio that measures a company's ability to pay its short-term obligations using current assets. It is also known as the working capital ratio because it compares a company's current assets to its current liabilities to determine whether it has enough working capital to meet its short-term financial obligations. The cash flow ratio measures a company's ability to generate cash flow from its operations, while the quick ratio and acid-test ratio are both more stringent measures of a company's liquidity, as they exclude inventory and other less liquid assets.

The Current Ratio Is Also Known as The