__________ measures ability to meet short-term obligations.

Question

Quizplus · Accepted Answer

Liquidity measures the ability of a company to meet its short-term obligations, which include payments due within a year or less. This is reflected in financial ratios such as the current ratio and the quick ratio, which assess the company's ability to pay its debts with its current assets. Leverage measures a company's use of debt to finance its operations, asset management measures how efficiently a company uses its assets to generate revenue, and profitability measures the company's ability to generate earnings relative to its costs and expenses.

__________ Measures Ability to Meet Short-Term Obligations