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A-25% of long term liabilities cannot paid B-25% of short term cannot paid C-75% of long term liabilities will be paid D-75% of current liabilities cannot paid
(B) is the Correct Ans.
Current Ratio of75 % mean = Current Assets are75 and Current Liabilities are100. So, B is the Correct.
Current ratio is75% this mean that25% of short term cannot paid.
The current ratio is mainly used to give an idea of the company's ability to pay back its short-term liabilities with its short-term assets. Here as the current ration is75% which means0.75 which is not a good sign for company to pay its short term liabilities or debt. Hence the correct is
'B'
25% of short term liabilities can't be paid from the existing current assets.
