Question : Current ratio is stated as a crude ratio because
Option 1: It measures only the quantity of current assets
Option 2: It measures only the quality of current assets
Option 3: Both of the above
Option 4: None of the above
Answer (1)
22nd Jan, 2024
Correct Answer: It measures only the quantity of current assets
Solution : Because it simply evaluates the quantity of current assets and not their quality, the current ratio is also known as the crude ratio.
Hence the correct answer is option 1.
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