A company with a high current ratio should be concerned that it is not maximizing its earnings potential.

Name: A company with a high current ratio should be concerned that it is not maximizing its earnings potential.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A high current ratio may indicate that the company has an excess of cash,which could be put to better use,or an excess of receivables or inventory.Any of these may prevent a company from maximizing its earnings potential.

A Company with a High Current Ratio Should Be Concerned