In examining the liquidity ratios, the primary emphasis is the firm's
A) ability to effectively employ its resources.
B) overall debt position.
C) ability to pay short-term obligations on time.
D) ability to earn an adequate return or profits.

Question

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Liquidity ratios measure a company's ability to meet its short-term obligations on time, so the primary emphasis in examining liquidity ratios is the firm's ability to pay short-term obligations on time.

In Examining the Liquidity Ratios, the Primary Emphasis Is the Firm's