_____ measure the ability of an organization to convert assets into the cash it needs to pay off liabilities that come due in the next year.
A)Profitability ratios
B)Activity ratios
C)Liquidity ratios
D)Leverage ratios

Question

Quizplus · Accepted Answer

Liquidity ratios measure a company's ability to meet short-term financial obligations by converting its assets into cash. These ratios are important for assessing a company's ability to cover its short-term debts and expenses. Activity ratios measure how efficiently a company uses its assets to generate revenue, while profitability ratios measure a company's ability to generate profits from its operations. Leverage ratios measure the extent to which a company relies on debt financing.

_____ Measure the Ability of an Organization to Convert Assets