Asked by miriam canela on Jul 20, 2024
Verified
The ratio of the sum of cash, receivables, and marketable securities to current liabilities is referred to as the current ratio.
Current Ratio
A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.
- Ascertain and detail the importance of a range of financial ratios in examining a company's financial robustness.
- Acquire knowledge about working capital and its essentiality for assessing short-term financial stability.
Verified Answer
TO
Tornike OvashviliJul 23, 2024
Final Answer :
False
Explanation :
The ratio described is the quick ratio (or acid-test ratio), which excludes inventories from current assets, unlike the current ratio that includes all current assets.
Learning Objectives
- Ascertain and detail the importance of a range of financial ratios in examining a company's financial robustness.
- Acquire knowledge about working capital and its essentiality for assessing short-term financial stability.
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