Current assets divided by current liabilities is the:Multiple ChoiceCurrent ratio.Quick ratio.Debt ratio.Liquidity ratio.Solvency ratio.

Break Down the Problem

1. Identify the terms provided in the question.
2. Understand the financial metrics mentioned.

Relevant Concepts

1. Current Ratio: This is calculated as Current Assets / Current Liabilities. It measures a company's ability to cover its short-term obligations.
2. Quick Ratio: This is a more stringent measure, calculated as (Current Assets - Inventory) / Current Liabilities.
3. Debt Ratio: This represents the proportion of a company's assets that are financed by debt.
4. Liquidity Ratio: This term can include the current ratio and quick ratio but is not a specific measure itself.
5. Solvency Ratio: This measures a company's ability to meet its long-term debts.

Analysis and Detail

• The question asks for the specific term that arises from the calculation of current assets divided by current liabilities.
• Given that this ratio directly reflects short-term financial health, the most appropriate term is the Current Ratio.

Verify and Summarize

• To confirm, we can recall that the ratio of current assets to current liabilities is commonly defined as the Current Ratio. Other options like Quick Ratio, Liquidity Ratio, Debt Ratio, and Solvency Ratio relate to different calculations or concepts and do not define this specific relationship.

Final Answer

The answer is: Current Ratio.