Question: If the Current Ratio, which is current assets divided by current liabilities, is greater than one, what does that indicate? A. It indicates that the

If the Current Ratio, which is current assets divided by current liabilities, is greater than one, what does that indicate?

A. It indicates that the company has fewer current assets than current liabilities or that is has poor liquidity.

B. It indicates that the company has more current assets than current liabilities, or that it has strong liquidity.

C. It indicates that a high percentage of total assets are financed by shareholders and/or owners equity as opposed to liabilities.

D. It indicates that the company will have a hard time meeting its short-term obligations.

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