When financial managers are concerned about their firm's ability to pay off debts that will come due in the next year, they are likely to focus on _________.
A)liquidity ratios
B)activity ratios
C)profitability ratios
D)leverage ratios

Question

Quizplus · Accepted Answer

Liquidity ratios measure a company's ability to meet short-term debt obligations. When financial managers are concerned about their firm's ability to pay off debts that will come due in the next year, they are likely to focus on liquidity ratios such as the current ratio and quick ratio.

When Financial Managers Are Concerned About Their Firm's Ability to Pay