Kwane wants to assess his firm's ability to meet its short-term obligations.Which of the following ratios are the most relevant?

Question

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Liquidity ratios are the most relevant for assessing a firm's ability to meet its short-term obligations. These ratios measure the firm's ability to convert current assets into cash to pay off current liabilities. Examples of liquidity ratios include current ratio, quick ratio, and cash ratio. Profitability ratios measure the firm's ability to generate profits in relation to its sales, while debt ratios measure the firm's financial leverage and activity ratios measure the firm's efficiency in using its assets.

Kwane Wants to Assess His Firm's Ability to Meet Its