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Identify a true statement about current ratios used by entrepreneurs for valuation. Multiple choice question. It provides a measure of risk to creditors by considering
Identify a true statement about current ratios used by entrepreneurs for valuation. Multiple choice question. It provides a measure of risk to creditors by considering the funds invested by creditors (debt) and investors. The entrepreneur need not compare this ratio with any industry standards The current liabilities must be covered from cash or its equivalent. It is a measure of risk because debt consists of a fixed commitment in the form of interest and principal repayments
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