Liquidity ratios measures the
A) Operating success of a company over a period of time
B) The ability of a company to survive over a long period of time
C) The short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash
D) The number of times interest is earned

Question

Quizplus · Accepted Answer

Liquidity ratios measure a company's ability to pay its short-term obligations (debts) and unexpected needs for cash. This includes ratios such as the current ratio, quick ratio, and cash ratio. Option A refers to profitability ratios, option B refers to solvency ratios, and option D refers to coverage ratios.

Liquidity Ratios Measures the