Your company's current ratio is 0.72. Which of the following is not true about your firm?

The current ratio is a financial metric that measures a company's ability to pay its short-term liabilities with its short-term assets. A ratio of 0.72 indicates that for every dollar of current liabilities, the company has only $0.72 in current assets. This situation illustrates that current assets do not exceed current liabilities, leading to the conclusion that the correct response emphasizes the misunderstanding of the relationship between current assets and current liabilities.

The assertion that current assets exceed current liabilities by 28% is inaccurate because a current ratio of less than 1 signifies that the liabilities are greater than the assets in this category. If the current assets were greater, the ratio would be above 1, demonstrating the ability to cover liabilities comfortably.

In contrast, the other statements reflect true aspects of the situation indicated by the current ratio. A company with a current ratio below 1 (as is the case here) generally faces potential liquidity challenges, indicating that it could struggle to meet its short-term obligations.