A procurement manager for a major retail group is using ratio analysis to assess the...

CIPS L4M4 Question Answer

A procurement manager for a major retail group is using ratio analysis to assess the financial viability of suppliers who have tendered for a logistics services tender. The recommended supplier has a current ratio of 0.6. What are the potential consequences of awarding the contract to this supplier, given their current ratio is below 1?

The results of the current ratio do not mean anything as long as the supplier has proven technical merit

The supplier will be unable to cover long-term liabilities from revenues

The supplier will have cash reserves to cover unexpected expenses

The supplier will be unable to pay its short-term liabilities using current assets

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Vendor: CIPS
Product: L4M4
Update on: Jul 30, 2025
Questions: 217

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Commodities can be traded on a stock exchange and are generally divided into one of...

What mechanism helps buying organisations achieve a best value outcome in a tender exercise?

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A procurement manager for a major retail group is using ratio analysis to assess the...

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