The current ratio is the ratio of current assets to current liabilities, whereas the - ratio is the ratio of cash, accounts receivable, and marketable securities to current liabilities.

The current ratio is:Question 3Answera.calculated by subtracting current liabilities from current assetsb.calculated by dividing current liabilities by current assetsc.used to evaluate a company's solvency and long-term debt paying abilityd.used to evaluate a company's liquidity and short-term debt paying ability

The current ratio is calculated by dividing:a.Current assets by current liabilitiesb.Current liabilities by current assetsc.Total assets by total liabilitiesd.Total liabilities by total assets

Current assets divided by current liabilities is the:Multiple ChoiceCurrent ratio.Quick ratio.Debt ratio.Liquidity ratio.Solvency ratio.

A current ratio of 2.20 indicates that:Multiple Choicefor each $1 in current assets, the company has $2.20 in current liabilities.for each $1 in total liabilities, the company has $2.20 in total assets.for each $1 in total assets, the company has $2.20 in total liabilities.for each $1 in current liabilities, the company has $2.20 in current assets.

A company’s Current Ratio is 2 : 1. After cash payment to some of its creditors, Current Ratio will:a.Decreaseb.Increasec.None of thesed.As before