What type of ratio measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue?
A) Earnings per share
B) Debt
C) Revenue recognition
D) Current
E) Activity
Answer: D
Explanation: D) This ratio measures a firm's ability to generate cash to meet current obligations through the normal, orderly process of selling inventories and collecting revenues from customers. It is calculated by dividing current assets by current liabilities.
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Answer the following statement true (T) or false (F)