The ratio group most likely to be used to indicate a firm's ability to meet short-term financial obligations would be ____.
A) liquidity ratios
B) financial leverage ratios
C) activity ratios
D) profitability ratios

Question

Quizplus · Accepted Answer

Liquidity ratios are designed to measure a company's ability to meet short-term obligations. These ratios include the current ratio, quick ratio, and cash ratio which measure a company's ability to pay its debts in the short term.

The Ratio Group Most Likely to Be Used to Indicate