A very short-term creditor would likely be most interested in a ﬁrm's ________________.
A) Current ratio
B) Quick ratio
C) NWC to total assets ratio
D) Cash ratio
E) Interval measure

Question

Quizplus · Accepted Answer

A very short-term creditor, someone who is lending money for a very brief period, would be most interested in a firm's ability to pay back the loan in the immediate future. Therefore, the cash ratio, which measures a firm's ability to pay back immediate debts with its cash and cash equivalents, would be the most relevant ratio for this creditor.

A Very Short-Term Creditor Would Likely Be Most Interested in a ﬁRm's