The operational study revealed that the company's inventory turnover is slow.This has forced them to maintain high levels of liquidity.Which of the following ratios is best suited to analyze the company's short-term solvency?

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The current ratio is the best choice to analyze the company's short-term solvency as it measures the ability of a company to meet its short-term obligations with its current assets. The fact that the company maintained high levels of liquidity due to slow inventory turnover indicates that its ability to pay its short-term obligations may be weak, and the current ratio will provide insights into the company's short-term solvency. Return on investment, equity ratio, and debt ratio are measures of profitability, financial strength, and leverage, respectively, and are not directly related to short-term solvency. Activity ratios, on the other hand, measure the efficiency of a company in managing its assets and can be relevant to assessing the company's ability to meet its short-term obligations, but the current ratio provides a more straightforward insight into short-term solvency.

The Operational Study Revealed That the Company's Inventory Turnover Is