The primary purpose of the liquidity ratios is to determine

Question

Quizplus · Accepted Answer

The primary purpose of liquidity ratios is to assess a company's ability to meet its short-term obligations by measuring its short-term liquidity or ability to generate enough cash flows to meet short-term obligations. Therefore, option C is the correct choice. Options A and B may be assessed using other financial ratios, such as inventory turnover ratio, debt-to-equity ratio, and current ratio, but they are not the primary purpose of liquidity ratios.

The Primary Purpose of the Liquidity Ratios Is to Determine