Which of the following is a measure of liquidity?
A)payables turnover
B)the current ratio
C)working capital
D)All of these are used to evaluate a company's liquidity.

Question

Quizplus · Accepted Answer

All three options listed (payables turnover, current ratio, and working capital) are commonly used measures of liquidity. Payables turnover measures the number of times a company pays its accounts payable during a given period, indicating how quickly it is able to meet its short-term obligations. The current ratio measures a company's ability to pay its short-term debts with its current assets, while working capital is the difference between a company's current assets and its current liabilities, providing a snapshot of its ability to cover its short-term operating costs. All three metrics are useful in evaluating a company's liquidity.

Which of the Following Is a Measure of Liquidity