Which one of the following would not be considered a liquidity ratio?
A)Current ratio
B)Inventory turnover ratio
C)Cash current debt coverage ratio
D)Return on assets ratio

Question

Quizplus · Accepted Answer

The liquidity ratios are used to measure a company's ability to meet its short-term obligations. The current ratio (A) measures whether a company has enough current assets to cover its current liabilities. The inventory turnover ratio (B) measures the efficiency of a company's inventory management. The cash current debt coverage ratio (C) measures whether a company generates enough cash to cover its current debt obligations. However, the return on assets ratio (D) measures how effectively a company is using its assets to generate profits and is not considered a liquidity ratio.

Which One of the Following Would Not Be Considered a Liquidity