A measure of a company's liquidity is:
A)Total assets divided by total equity.
B)The current ratio.
C)The dollar amount of liabilities that bear interest.
D)The dollar amount of assets used as collateral for a loan.

Question

Quizplus · Accepted Answer

The current ratio is a measure of a company's liquidity, indicating its ability to pay off short-term debts with its current assets. A higher current ratio indicates a better ability to meet short-term obligations. The other choices do not directly measure liquidity.

A Measure of a Company's Liquidity Is