question 1\nwhich of the following is generally a false statement for the current - ratio analysis?\nanswer\n…

question 1\nwhich of the following is generally a false statement for the current - ratio analysis?\nanswer\ncompanies want a current ratio number below 1\na potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay\ncurrent ratios measure the ability of the company to pay its current liabilities with current assets\na business with a lot of debt (liabilities) will have a higher current ratio.\ni dont know yet

question 1\nwhich of the following is generally a false statement for the current - ratio analysis?\nanswer\ncompanies want a current ratio number below 1\na potential lender, such as a bank, might use the current ratio to predict if the business borrowing the money can repay\ncurrent ratios measure the ability of the company to pay its current liabilities with current assets\na business with a lot of debt (liabilities) will have a higher current ratio.\ni dont know yet

Answer

Brief Explanations:

The current ratio is calculated as Current Assets/Current Liabilities. A ratio above 1 is generally preferred as it indicates the company can pay off its current liabilities with its current assets. Lenders use it to assess repayment ability. A business with a lot of debt (liabilities) will have a lower current ratio if assets don't increase proportionally. So, the statement that companies want a current - ratio number below 1 is false.

Answer:

A. Companies want a current ratio number below 1