A liquidity ratio measures the
A)profit or operating success of a company over a period of time.
B)ability of a company to survive over a long period of time.
C)short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash.
D)percentage of total financing provided by creditors.

Question

Quizplus · Accepted Answer

The liquidity ratio is specifically designed to measure a company's short-term ability to pay its maturing obligations and handle unexpected cash needs. Option A refers to a profitability ratio, Option B refers to a solvency ratio, and Option D refers to a debt ratio.

A Liquidity Ratio Measures the