Which of the following measures of liquidity does not control for the relative size of the company?
A)Working capital.
B)Current ratio.
C)Acid-test ratio.

Question

Quizplus · Accepted Answer

Working capital is a dollar amount and does not take into account the size of the company, whereas the current ratio and acid-test ratio are ratios and therefore do control for the size of the company.

Which of the Following Measures of Liquidity Does Not Control