Which of the Following Statements About the Current Ratio Is

Multiple Choice

Which of the following statements about the current ratio is NOT true?

A) The current ratio indicates whether the company has enough short-term assets to cover its short-term debts.
B) An extremely high ratio is always a favourable sign.
C) A ratio above 1 indicates that working capital is positive.
D) The current ratio is calculated as current assets divided by current liabilities.