The quick ratio and the day's sales outstanding measure:
A)a company's cash conversion cycle.
B)a company's profitability.
C)a company's liquidity.
D)all of the above.

Question

Quizplus · Accepted Answer

The quick ratio and the day's sales outstanding both help in measuring a company's liquidity. The quick ratio measures a company's ability to pay their short-term obligations with their most liquid assets, while the day's sales outstanding measures the average time it takes for a company to collect payment from their customers for goods and services provided.

The Quick Ratio and the Day's Sales Outstanding Measure