Business Finance Practice

Topics

Capital Budgeting Decisions
- NPV
- Payback Period
Capital Structure
Dividend Decision
- Financial Management
Financial Management
Financial Ratios
Sources Of Finance
Working Capital Management
- Liquidity Ratios

Loading practice questions

A focused practice platform for competitive-exam MCQs, subject wise, topic wise practice, and current affairs revision.

Exams

SSC CGL
UPSC CSE PRELIMS
IBPS PO
RRB NTPC
CDS

Subjects

Mathematics
Physics
General Knowledge
English
Reasoning

Resources

Current Affairs
Search MCQs
Practice Sets

Company

About Us
Contact
Privacy Policy
Terms of Use
Disclaimer
Copyright

Practice library for exams, subjects, and daily revision. For learning purposes only.

Liquidity Ratios : Business Finance MCQ Practice Questions & Answers (English) - ObjectiveMcq

Business Finance Practice

All Practice

Topics

Capital Budgeting Decisions
- NPV
- Payback Period
Capital Structure
Dividend Decision
- Financial Management
Financial Management
Financial Ratios
Sources Of Finance
Working Capital Management
- Liquidity Ratios

PracticeBusiness FinanceWorking Capital ManagementLiquidity Ratios

Liquidity Ratios in Business Finance : Practice MCQ Questions & Answers with Explanations

1 practice sets · Page 1 of 1

Business FinanceEasyWorking Capital ManagementLiquidity Ratios

The current ratio is calculated as:

Current Assets / Current Liabilities

Current Liabilities / Current Assets

Net Working Capital / Total Assets

Cash / Current Liabilities

Correct Answer:

(A) Current Assets / Current Liabilities

Explanation:

The correct answer is A: Current Assets / Current Liabilities.

The current ratio measures a company's ability to pay off its short-term liabilities using its short-term assets. A ratio above 1 indicates the company has more current assets than current liabilities, suggesting good short-term liquidity. A ratio below 1 may indicate potential liquidity problems.