Maurio Pena, a petroleum company, needs to pay $2 million to Zaiten Inc. Maurio Pena sells its old assets to another company and obtains enough money to pay its debt. In this scenario, Maurio Pena's ability to sell its old assets to another company in order to pay its debt to Zaiten is measured by analyzing _____.
A) leverage ratios
B) asset management ratios
C) liquidity ratios
D) profitability ratios

Question

Quizplus · Accepted Answer

Liquidity ratios measure a company's ability to meet its short-term obligations, such as paying debts, by converting assets into cash.

Maurio Pena, a Petroleum Company, Needs to Pay $2 Million