Which ratio is considered an internal liquidity ratio?
A) Total asset turnover
B) Net fixed asset turnover
C) Receivables turnover
D) Equity turnover
E) Inventory turnover

Question

Quizplus · Accepted Answer

Receivables turnover is considered an internal liquidity ratio as it measures the ability of a company to convert its receivables into cash to meet its short-term obligations. Total asset turnover, net fixed asset turnover, equity turnover, and inventory turnover are all ratios that measure efficiency or activity, rather than liquidity.

Which Ratio Is Considered an Internal Liquidity Ratio