The ratios that are used to determine a company's short-term debt paying ability are
A) asset turnover, times interest earned, current ratio, and accounts receivables turnover.
B) times interest earned, inventory turnover, current ratio, and receivables turnover.
C) times interest earned, accounts receivable turnover ratio, current ratio, and inventory turnover.
D) current ratio, account receivable turnover, and inventory turnover.

Question

Quizplus · Accepted Answer

The current ratio, accounts receivable turnover, and inventory turnover are all measures of a company's ability to pay short-term obligations. The current ratio assesses liquidity, while the turnover ratios evaluate how efficiently assets are converted to cash.

The Ratios That Are Used to Determine a Company's Short-Term