Question: Identify a true statement about current ratios used by entrepreneurs for valuation. Multiple choice question. The current liabilities must be covered from cash or its

Identify a true statement about current ratios used by entrepreneurs for valuation. Multiple choice question. The current liabilities must be covered from cash or its equivalent. It is a measure of risk because debt consists of a fixed commitment in the form of interest and principal repayments. It provides a measure of risk to creditors by considering the funds invested by creditors (debt) and investors. The entrepreneur need not compare this ratio with any industry standards

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