The ________ ratios measure an organization's ability to meet its current debt obligations.
A) activity
B) liquidity
C) leverage
D) profitability

Question

Quizplus · Accepted Answer

Liquidity ratios measure an organization's ability to meet its current debt obligations, which includes the ability to repay short-term loans and pay off current liabilities. Examples of liquidity ratios include the current ratio and the quick ratio. Activity ratios measure how efficiently a company is using its assets, while leverage ratios measure the amount of debt in relation to equity. Profitability ratios assess a company's ability to generate earnings and profits.

The ________ Ratios Measure an Organization's Ability to Meet Its