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A current ratio less than 1.0 means that current liabilities exceed current assets. A firm having a current ratio less than 1.0 has: more debts

A current ratio less than 1.0 means that current liabilities exceed current assets. A firm having a current ratio less than 1.0 has:

more debts due within the next year than assets that should convert ta cash within that same time period. enough assets that will convert to cash in time to pay all of the debts payable within the next twelve months. less total assets than it does debts payable within the upcoming twelve menths suficient short-term assets to meet its short-term obligations provided that all assets sell at their stated book value. more total assets than it does debts payable within the upcoming twelve months.

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