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If a firm's current ratio is less than 1.0, it indicates tha

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13. If a firm's current ratio is less than 1.0, it indicates that:

a. The firm had negative net income for the year

b. The firm will be unable to pay its shortterm loans which come due this year

c. Current Assets are less than Current Liabilities

d. The firm is insolvent

14. A firm which has a relatively large amount of cash and receivables in its current assets accounts and a relatively small amount of current liabilities would be considered:

a. liquid

b. profitable

c. risky

d. nuts

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Solution Preview

13. If a firm's current ratio is less than 1.0, it indicates that:

a. The firm had negative net income for the year

b. The firm will be unable to pay its shortterm loans which come due this year

c. Current Assets are less than Current Liabilities XX this ...

Solution Summary

If a firm's current ratio is less than 1.0, it indicates that:

a. The firm had negative net income for the year

b. The firm will be unable to pay its shortterm loans which come due this year

c. Current Assets are less than Current Liabilities

d. The firm is insolvent

14. A firm which has a relatively large amount of cash and receivables in its current assets accounts and a relatively small amount of current liabilities would be considered:

a. liquid

b. profitable

c. risky

d. nuts

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