Accounts inventory turnoN d Current ratio Answer Multiple Ch

Accounts inventory turnoN d. Current ratio Answer. Multiple Choice Quesion 193 The current ratio would be of most interest to a. stockholders b. long-term creditors. C. CUstomers d. short-term creditors Answer

Solution

d. short term creditors

Current Ratio is measurement of company\'s ability to meet it\'s short term debt.It is calculated by dividing current assets by current liabilities.If current ratio is higher then it means company has more current assets than its current liabilities and so it has good liquidity to pay its short term creditors. On the other side low current ratio shows company\'s weak liquidity to pay its short term creditors.