If current liabilities exceed current assets, then the:
A)current ratio will be less than one.
B)current ratio will be more than one.
C)quick ratio will be more than one.
D)none of the above.

Question

Quizplus · Accepted Answer

The current ratio is calculated by dividing current assets by current liabilities. If current liabilities exceed current assets, the resulting current ratio will be less than one. This indicates that the company may have difficulty meeting its short-term financial obligations.

If Current Liabilities Exceed Current Assets, Then The