Liquidity ratios measure:

Question

Quizplus · Accepted Answer

Liquidity ratios are financial metrics used to assess a company's ability to meet its short-term obligations. They focus on a company's ability to generate cash or convert assets into cash quickly to cover debts, hence A) is correct as it directly relates to a company's ability to manage its short-term financial health, including meeting obligations, collecting receivables, and maintaining a cash position. Choices B, C, and D relate to operational efficiency and cost management, not liquidity.

Liquidity Ratios Measure