Multiple Choice
Which of the following statements about liquidity ratios is true?
A) The lower the quick ratio relative to the current ratio, the safer a firm is in terms of liquidity.
B) The higher the current ratio, the more likely a firm is able to pay its short-term obligations.
C) The quick ratio is always between 0 and 1.
D) Higher leverage reduces the quick ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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