Banking · Financial Ratio Analysis
Read the following statements carefully: Statement 1: The Current Ratio is a liquidity ratio that assesses a borrower's ability to pay off short-term liabilities using short-term assets. Statement 2: A Current Ratio below 1 suggests that the borrower might struggle with short-term liquidity.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement 1 and Statement 2 are incorrect.
- 2Statement 1 is incorrect, but Statement 2 is correct.
- 3Statement 1 is correct, but Statement 2 is incorrect.
- 4Both Statement 1 and Statement 2 are correct.✓
Correct answer
Both Statement 1 and Statement 2 are correct.
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