Question

Martin Company has a cash ratio of 0.3. This implies that the company​ _________. A. is not in a position to meet its​ long-term obligations B. has no liquidity issues C. has an unnecessarily large amount of cash supply D. is not sending a strong message to investors and creditors that it has the ability to repay its​ short-term debt

Answer 1

Answer:

D. is not sending a strong message to investors and creditors that it has the ability to repay its​ short-term debt

Explanation:

The cash ratio helps measure the liquidity of the company as it shows if it can cover its short-term debt with the cash aand cash equivalents it has. When the ratio is less than 1, as in this case, it means that  the company doesn't have enough cash to cover the short-term debt.