Maurice was asked to extend trade credit to a restaurant she hadn't serviced before.She asked to see its balance sheet to determine if it could pay its bills.She divided its current assets by current liabilities to get its:

A) current ratio.
B) receivable turnover.
C) inventory turnover.
D) earnings per share.
E) book value per share.

Trade Credit

A financial agreement in which a customer is allowed to purchase goods or services and pay the supplier at a later scheduled date, effectively extending interest-free credit.

Current Liabilities

Short-term financial obligations a company is required to pay within one year or within the normal operating cycle.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year.