Problem based on current ratio


If the only information you were given about Ryan corperation, a large public company in business for many years, was that had a current ratio of 2.9, what could you determine from this?

A. you could determine that Ryan has an activity problem because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio

B. Nothing, you would also need Ryan Corporation's current ratios from the last few years of Ryan's competitors

C. Nothing, you would also need the current ratio from last years S&P 500 index

D. You could determine that Ryan has a liquidity because Ryan's current ratio is greater than 2 which is the rule of thumb for the current ratio.

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Accounting Basics: Problem based on current ratio
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