Ratios used to determine whether or not a company can pay its bills on time are ________.
A)liquidity ratios
B)solvency ratios
C)profitability ratios
D)market indicators

Question

Quizplus · Accepted Answer

Liquidity ratios are used to measure a company's ability to pay its bills and meet its short-term obligations on time. Solvency ratios measure a company's ability to meet its long-term debt obligations, profitability ratios measure a company's financial performance, and market indicators measure the overall market sentiment and the company's stock price. Therefore, liquidity ratios are the best choice for determining whether or not a company can pay its bills on time.

Ratios Used to Determine Whether or Not a Company Can