A common measure of liquidity is
A) ratio of net sales to assets.
B) dividends per share of common stock.
C) receivable turnover.
D) profit margin.

Question

Quizplus · Accepted Answer

Receivable turnover is a common measure of liquidity as it indicates how quickly a company is able to collect its accounts receivable, which in turn affects its ability to pay off its debts and other financial obligations. A high receivable turnover ratio indicates that a company is able to collect its accounts receivable quickly, which is a positive sign for its liquidity.

A Common Measure of Liquidity Is