Answer:
D. It measures a firm's ability to pay its long-term debts as they mature
Explanation:
The current ratio is a ratio of current assets and the current liability which is required to judge the liquidity of the short term.
Current ratio = (Total Current assets) ÷ (total current liabilities)
It is always expressed in times
The current assets equal to
= Cash balance + Short-term investments + Accounts and notes receivable + Inventories + Prepaid expenses, etc
And, the current liabilities
= Short-term obligations + Accounts payable
