Question

The current ratio is the ratio of
A) Current assets to total assets
B) Current liabilities to total liabilities
C) Current Assets to Current liabilities
D) Current liabilities to equity
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Answer 1

The current ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year. It tells investors and analysts how a company can maximize the current assets on its balance sheet to satisfy its current debt and other payables.

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