Question
A company has a current ratio of 5 to 1. The current ratio average for the industry is 2 to 1. This ratio is: a.
A company has a current ratio of 5 to 1. The current ratio average for the industry is 2 to 1. This ratio is:
| a. | shows the possibility that the company has a unstable standard deviation, as it applies to its beta formula. | |
| b. an excellent ratio and one that should be maintained, since the company is obtaining a great interest rate on its cash reserves in today's economic environment. | ||
| c. shows the company has too much in the way of long-term liabilities. | ||
| d. could be deceiving, because keeping too much cash on hand could signify indecisiveness by management for making additional long-term investements. |
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