a low current ratio in business indicates that the business is
-
A.
long term loan repayment problem -
B.
efficient in the utilization of its resources -
C.
unable to pay its bills on time -
D.
growing its net assets effectively
Correct Answer: Option C
Explanation
A low current ratio indicates problems in working capital management. All other things being equal, creditors consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which are due over the next 12 months.