The current ratio is an indicator of which following characteristic of an organization?

A) The current level of profitability
B) The future level of profitability
C) The investment potential
D) The liquidity in the short term
E) None of these

Show answer

Answer: D) The liquidity in the short term

Explanation

D) The liquidity in the short term. The current ratio is current assets divided by current liabilities. It shows whether a firm can pay what falls due within a year from assets it can turn into cash within a year. It says nothing direct about profit or investment appeal.

Asked in: SGFL 2017

Topic: Arithmetic

Practise this topic

একটি পাত্রে দুধ ও পানির অনুপাত ৫ : ১। দুধের পরিমাণ যদি পানি অপেক্ষা ৮ লিটার বেশি হয় তবে পানির পরিমাণ কত?
A student's marks were wrongly entered as 83 instead of 63. Due to the error the average marks for the class got increased by 0.5. Find the number of students in the class.
Which of the following reasons is responsible for the conflict in rankings of mutually exclusive investment projects?
Mr. Power attends to, on the average, 12 TV service calls per day. Mr. Fixit attends to, on the average, 16 service calls per day. Mr. Power's average is 3/2 as much as that Mr. Fixit, who earns Tk. 7200 per month. The monthly dibi earnings of Mr. Power, in Taka, is:
একটি স্কুলে মোট ৫৪০ জন ছাত্রের মধ্যে কোন এক বুধবারে ২৭ জন অনুপস্থিত ছিল। ঐদিন শতকরা কত জন ছাত্র উপস্থিত ছিল?

The current ratio is an indicator of which following characteristic of an organization?

Explanation

More questions on this topic