BANKING GENERAL KNOWLEDGE
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Question
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What does Current Ratio mean?
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company’s ability to pay back its long-term liabilities
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it is the ratio of net debt to total liabilities
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it is the ratio of liquid assets to current liabilities
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company’s ability to pay back its short-term liabilities
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Explanation:
Detailed explanation-1: -This ratio compares a company’s current assets to its current liabilities, testing whether it sustainably balances assets, financing, and liabilities. Typically, the current ratio is used as a general metric of financial health since it shows a company’s ability to pay off short-term debts.
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