Answer:
A. True
Explanation:
The current ratio shows a relationship between the current assets and the current liabilities
In mathematically,
Current ratio = Total Current assets ÷ total current liabilities
where,
The current assets = Cash and cash equivalents + Short-term investments + Accounts and notes receivable + Inventories + Prepaid expenses and other current assets
And, current liabilities would be
= Short-term obligations + Accounts payable
This current ratio is always expressed in times plus its reflects the liquidity of the business organization
