The current ratio measures ________.
A)a company's ability to sell its long-term assets
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 its current liabilities with its current assets. It helps assess whether a company has enough cash or other liquid assets to meet its short-term financial obligations. A current ratio of 1 or higher is generally considered to be a good measure of a company's liquidity.

The Current Ratio Measures ________