Liquidity is generally measured by the company's ability to pay its short term obligations using its short assets.

Name: Liquidity is generally measured by the company's ability to pay its short term obligations using its short assets.
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Question

Quizplus · Accepted Answer

Liquidity is indeed measured by the company's ability to cover its short term (current) obligations using its short-term or liquid (current) assets. This is usually measured using the current ratio, quick ratio or cash ratio.

Liquidity Is Generally Measured by the Company's Ability to Pay