With regard to liabilities, liquidity refers to
A) a company's ability to convert its assets to cash to pay for its liabilities.
B) a company's ability to use its financial resources to adapt to change.
C) a company's operating cycle.
D) only liabilities and not assets.

Question

Quizplus · Accepted Answer

Liquidity refers to a company's ability to convert its assets into cash or cash equivalents in order to pay off its liabilities when they are due. This involves the ease with which assets can be converted into cash without significant loss of value.

With Regard to Liabilities, Liquidity Refers to