current ratio and inventory turnover ratios both help us measure the firm's liquidity The current ratio measures the relationship of a firm's current assets to its current liabilities, while the inventory turnover ratio gives us an indication of how long it takes the firm to convert its inventory into cash.

Question

Quizplus · Accepted Answer

Both statements are true. The current ratio and inventory turnover ratio are both used to assess a company's liquidity.

Current Ratio and Inventory Turnover Ratios Both Help Us Measure