A liquidity ratio measures the
A) 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) number of times interest is earned or "covered".

Question

Quizplus · Accepted Answer

Liquidity ratios measure a company's ability to meet its short-term obligations and handle unexpected needs for cash, which is what option C describes.

A Liquidity Ratio Measures the