The liquidity ratio is an indicator of a family's ability to pay current debts if there is an interruption in income.

Question

Quizplus · Accepted Answer

The liquidity ratio measures a family's ability to pay off current debts with current assets. This would be important in the event of an interruption in income, as it shows how easily a family can access funds to cover their obligations. Therefore, option A is correct.

The Liquidity Ratio Is an Indicator of a Family's Ability