An increase in the current ratio would indicate an increase in
A) leverage.
B) liquidity.
C) return on investment.
D) operating income.

Question

Quizplus · Accepted Answer

The current ratio is a measure of a company's ability to pay its short-term obligations using its current assets. An increase in the current ratio means that the company has a higher proportion of current assets relative to its current liabilities, indicating improved liquidity. It does not necessarily indicate an increase in leverage, return on investment, or operating income.

An Increase in the Current Ratio Would Indicate an Increase