Both liquidity ratios and solvency ratios measure a company's ability to meet its financial obligations.
BT: Comprehension

Question

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Both liquidity ratios and solvency ratios are used to assess a company's ability to meet its financial obligations. However, liquidity ratios evaluate a company's ability to generate cash in the short term, while solvency ratios assess its ability to meet long-term financial obligations.

Both Liquidity Ratios and Solvency Ratios Measure a Company's Ability