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JAMB Commerce 1995 Question 15

Question 15

Business Calculations

The financial index which compares current assets directly with current liabilities is known as current

  1. A.turnover
  2. B.capital
  3. C.ratio
  4. D.balance
Show the answer and explanation

Answer: C (ratio)

Explanation

Current ratio = current assets ÷ current liabilities; it shows whether a firm can pay its short-term debts.