The ability of the organization to meet its current debt obligations is indicated by a(n) __________ ratio.
A) activity
B) liquidity
C) profitability
D) conversion
E) growth

Question

Quizplus · Accepted Answer

The liquidity ratio measures the ability of a company to meet its short-term debt obligations, primarily by using its current assets, such as cash, accounts receivable, and inventory. This ratio indicates the company's ability to pay off its current debts as they become due.

The Ability of the Organization to Meet Its Current Debt