The relationship between current assets and current liabilities is important in evaluating a company's?

Question

profitability.liquidity.market value.accounting cycle.

I think it is market value, am I correct?

Answer 1

The relationship between current assets and current liabilities is important in evaluating a company's liquidity.

Current ratio = Current Assets/Curren Liabilities -

A simple measure that estimates whether the business can pay debts due within one year from assets that it expects to turn into cash within that year. A ratio of less than one is often a cause for concern, particularly if it persists for any length of time.