A current ratio of one (1) is sometimes used to assess a firms liquidity. The rationale for this is that

a.A ratio less than one would signal that the firms current liabilities exceed the firms liquid (current) assets.

b.The balance of firm assets that are expected to be converted to cash within one year is just enough to cover the firms liabilities that are due within the year.

c.The firm has more assets than liabilities.

d.Both a and b are correct.

e.None of the above