The __________ can indicate whether or not firms have trouble meeting their short-term debt obligations.
A) cash ratios
B) liquidity ratios
C) activity ratios
D) debt ratios
E) profitability ratios

Question

Quizplus · Accepted Answer

Liquidity ratios, such as the current ratio and quick ratio, measure a company's ability to meet its short-term obligations with its short-term assets. This makes them indicators of a firm's financial health in terms of meeting short-term debt obligations.

The __________ Can Indicate Whether or Not Firms Have Trouble