Current ratio

A) Assess the profitability of the assets
B) Assess how effectively assets are used
C) Indicate the ability to pay current liabilities
D) Indicate how much of the company is financed by debt and equity
E) Indicate instant debt-paying ability
F) Assess the profitability of the investment by common stockholders
G) Indicate future earnings prospects
H) Indicate the extent to which earnings are being distributed to common stockholders

The current ratio is a measure of a company's ability to pay current liabilities, as it compares current assets to current liabilities.

Answer: E
The current ratio can also indicate instant debt-paying ability, as it shows the company's ability to pay its short-term obligations with its current assets.

Note: Although the current ratio can provide some information about a company's profitability and financial structure, it is not the best ratio to use for those purposes.