A firm's ability to pay its obligations as they come due and to meet any unforeseen needs for cash is called
A)current ratio.
B)liquidity.
C)working capital.
D)accounts receivable turnover.

Question

Quizplus · Accepted Answer

The definition given in the question is indicative of liquidity, which is the ability of a firm to convert its assets into cash easily to meet its short-term obligations. Other options listed (current ratio, working capital, accounts receivable turnover) are related to liquidity but do not fully capture the concept.

A Firm's Ability to Pay Its Obligations as They Come