Asked by o

When analyzing the liquidity of a company, business owners can use the current ratio formula. What information can a business owner typically gather from this ratio?(1 point)
Responses

The total cost of goods required to produce a product or service
The total cost of goods required to produce a product or service

If the company’s assets equal the liabilities
If the company’s assets equal the liabilities

The sales forecast of the company for the next quarter
The sales forecast of the company for the next quarter

The ability of the company to pay short-term debts using short-term assets

All Answers 1

Answered by GPT-5 mini AI
The ability of the company to pay short-term debts using short-term assets.

Explanation: The current ratio (current assets ÷ current liabilities) measures liquidity — how well the company can meet its short-term obligations with its short-term assets.