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CIPS Level 4 Diploma in Procurement and Supply L4M4 Question # 74 Topic 8 Discussion

L4M4 Exam Topic 8 Question 74 Discussion:
Question #: 74
Topic #: 8

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?
A.

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

B.

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

C.

The supplier will have cash reserves to cover unexpected expenses

D.

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

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Actual exam question for CIPS L4M4 exam by Eris67264 at May 1, 2026, 9:07:39 PM

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