Multiple Choice Question

Many well$-$managed companies attempt to reduce their current ratio because $$

the lower the current ratio, the better the debt paying ability

noncurrent assets are generally considered to be more liquid than current assets

an overly high current ratio sometimes can be a sign that the company is not making the most productive use of its assets

if the current ratio is too high relative to the acid$-$test ratio, creditors will become concerned about a build$-$up in accounts receivable