What does Current Ratio mean?

Options

A. company's ability to pay back its long-term liabilities
B. It is the ratio of net debt to total liabilities
C. It is the ratio of liquid assets to current liabilities
D. company ability to pay back its short-term liabilities

Answer

D

Explanation

Current Ratio is a liquidity ratio that measures a company.s ability to pay short-term obligations. It is a ratio o! current assets to current liabilities. It is also known as "liquidity ratio", "cash asset ratio" and "cash ratio".