The best measure of a company's ability to meet imminent financial obligations is known as the
A) debt ratio
B) current ratio
C) total asset turnover
D) profit margin

Question

Quizplus · Accepted Answer

According to Exhibit 3.9, short-term solvency ratios are also known as liquidity ratios. The best measure of the ability of a company to meet imminent financial obligations is the current ratio, the ratio of current assets to current liabilities.

The Best Measure of a Company's Ability to Meet Imminent