What is the best measure of a company's liquidity?
A) the quick ratio
B) the debt-to-total assets ratio
C) the current ratio
D) the times-interest-earned

Name: What is the best measure of a company's liquidity? A) the quick ratio B) the debt-to-total assets ratio C) the current ratio D) the times-interest-earned
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Question

Quizplus · Accepted Answer

The quick ratio is considered a better measure of liquidity than the current ratio because it excludes inventory, which may not be easily converted to cash.

What Is the Best Measure of a Company's Liquidity