A manager that uses ratios such as cash and deposits due from banks to total assets and U.S.government securities to total assets to measure a firm's liquidity position is using:
A)the sources and uses of funds approach.
B)the structured funds approach.
C)the liquidity indicator approach.
D)signals from the market place.
E)None of the options is correct.

Question

Quizplus · Accepted Answer

The manager is using the liquidity indicator approach, which involves analyzing ratios and indicators that measure a company's ability to meet its short-term financial obligations. The other options do not accurately describe the approach being used.

A Manager That Uses Ratios Such as Cash and Deposits