The current ratio is calculated by dividing current liabilit

The current ratio is calculated by dividing current liabilities by current assets. used to evaluate a company\'s liquidity and short-term debt paying ability. used to evaluate a company\'s solvency and long-term debt paying ability. calculated by subtracting current liabilities from current assets.

Solution

B. used to evaluate a company\'s liquidity and short-term debt paying ability.

The current ratio is a liquidity ratio that measures a company\'s ability to pay short-term and long-term obligations.