When analyzing a company's current ratio: A. the industry in which the company operates should not be considered. B. most successful businesses operate with current ratios between 0.1 and 0.5. C. the current ratio measures the company's ability to pay all liabilities (current and long-term) with current assets. D. a current ratio of less than 1.00 means that current liabilities exceed current assets.
When analyzing a company's current ratio: A. the industry in which the company operates should not be considered. B. most successful businesses operate with current ratios between 0.1 and 0.5. C. the current ratio measures the company's ability to pay all liabilities (current and long-term) with current assets. D. a current ratio of less than 1.00 means that current liabilities exceed current assets.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When analyzing a company's current ratio:
A.
the industry in which the company operates should not be considered.
B.
most successful businesses operate with current ratios between 0.1 and 0.5.
C.
the current ratio measures the company's ability to pay all liabilities (current and long-term) with current assets.
D.
a current ratio of less than 1.00 means that current liabilities exceed current assets.
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