a low current ratio in business indicates that the business is

  • A long term loan repayment problem
  • B efficient in the utilization of its resources
  • C unable to pay its bills on time
  • D growing its net assets effectively
waec 2013accounting

The correct answer is C. unable to pay its bills on time

A low current ratio indicates problems in working capital management. All other things being equal, creditors consider a high current ratio to be better than a low current ratio, because a high current ratio means that the company is more likely to meet its liabilities which are due over the next 12 months.

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