Post Utme Afe Babalola University 2025 Commerce Question 16

Practice objective / multiple choice question 16 from the 2025 Post Utme Afe Babalola University Commerce examination.

Post Utme Afe Babalola University 2025 Commerce Objective / Multiple Choice

Question 16 POST_UTME_AFE_BABALOLA_UNIVERSITY • 2025 • COMMERCE • objective

A company's financial statements show that its current ratio is 2.5 and its acid-test ratio is 1.8. What can be inferred about the company's liquidity position?

Answer Options

A. The company has a high level of liquidity and can easily meet its short-term obligations.

Correct Answer B. The company has a moderate level of liquidity and may face some difficulties in meeting its short-term obligations.

C. The company has a low level of liquidity and is likely to face significant difficulties in meeting its short-term obligations.

D. The company's liquidity position cannot be determined from the given information.

Correct Answer

Correct Option:

The company has a moderate level of liquidity and may face some difficulties in meeting its short-term obligations.

About This Question

This is Post Utme Afe Babalola University 2025 Commerce Question 16. It is one of the objective questions from the 2025 Post Utme Afe Babalola University Commerce examination.

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