Which ratio is a measure of liquidity that excludes inventories?

Question

Quizplus · Accepted Answer

The ratio that is a measure of liquidity that excludes inventories is the Liquid ratio. This ratio is calculated by dividing current assets minus inventories by current liabilities, and it provides information about a company's ability to meet short-term obligations without relying on the sale of inventories. A higher liquid ratio is generally considered to be better as it signifies that the company has more liquid assets to pay off its short-term debts.

Which Ratio Is a Measure of Liquidity That Excludes Inventories