Question

    How are current liabilities used in financial analysis?

    A To evaluate a company’s ability to pay its long-term debt Correct Answer Incorrect Answer
    B To evaluate a company’s profitability Correct Answer Incorrect Answer
    C To evaluate a company’s liquidity Correct Answer Incorrect Answer
    D To evaluate a company’s solvency Correct Answer Incorrect Answer

    Solution

    Current liabilities are used in financial analysis to evaluate a company’s liquidity, or its ability to meet short-term financial obligations. 

    Practice Next

    Relevant for Exams: