Liquidity relates to a company's ability to do which of the following?
A) The ability to pay its financial obligations as they become due
B) The ability to stay in business over the long run
C) The ability to pay dividends to its stockholders
D) The ability to collect the amount their customers owe the company

Question

Quizplus · Accepted Answer

Liquidity refers to a company's ability to meet its short-term financial obligations, such as paying bills, salaries, and debts as they become due. It does not relate to a company's ability to stay in business over the long run, pay dividends to shareholders, or collect amounts from customers.

Liquidity Relates to a Company's Ability to Do Which of the Following