Which one of the following types of ratios indicates the ability to meet short-term obligations to creditors as they come due?
A) liquidity ratios
B) asset management ratios
C) capital structure ratios
D) profitability ratios

Question

Quizplus · Accepted Answer

Liquidity ratios are specifically designed to measure a company's ability to pay off its short-term debt obligations. These ratios are considered a measure of how easily a company can convert its assets into cash to meet its current liabilities.

Which One of the Following Types of Ratios Indicates the Ability