Which of the following measures of liquidity does not control for the relative size of the company?
A)Working capital.
B)Current ratio.
C)Acid-test ratio.
D)They all control for the relative size of the company.

Question

Quizplus · Accepted Answer

Working capital is an absolute measure of liquidity and does not consider the size of the company. Current ratio and acid-test ratio both factor in the size of the company by comparing current assets to current liabilities.

Which of the Following Measures of Liquidity Does Not Control