A common measure of liquidity is
A) the asset turnover ratio
B) dividends per share of common stock
C) the accounts receivable turnover
D) the profit margin

Question

Quizplus · Accepted Answer

The accounts receivable turnover ratio measures how efficiently a company collects its outstanding debts from customers. A higher accounts receivable turnover indicates that a company is collecting its debts more quickly and has more cash available for operations, making it a good indicator of liquidity. The other measures listed are more related to profitability and efficiency, rather than liquidity.

A Common Measure of Liquidity Is