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  3. Study Set
    Principles of Managerial Finance
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    Exam 3: Financial Statements and Ratio Analysis
  5. Question
    The Current Ratio Provides a Better Measure of Overall Liquidity
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The Current Ratio Provides a Better Measure of Overall Liquidity

Question 94

Question 94

True/False

The current ratio provides a better measure of overall liquidity only when a firm's inventory cannot easily be converted into cash. If inventory is liquid, the quick ratio is a preferred measure of overall liquidity.

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