Which of the following measures the liquidity of a company?
A)Return on Owners' Equity
B)Gross Margin Ratio
C)Return on Investment
D)Quick Ratio

Question

Quizplus · Accepted Answer

The Quick Ratio measures a company's ability to use its most liquid assets to pay off its current liabilities. Therefore, it is an indicator of a company's liquidity. Option A, Return on Owners' Equity, measures the profitability of a company relative to the owner's investment. Option B, Gross Margin Ratio, measures the profitability of a company's sales, while option C, Return on Investment, measures a company's profitability relative to its total investment in assets.

Which of the Following Measures the Liquidity of a Company