Which of the following measures would assist in assessing the liquidity of a company?
A)Return on equity.
B)Fixed asset turnover ratio.
C)Receivables turnover ratio.
D)Times interest earned ratio.

Question

Quizplus · Accepted Answer

The receivables turnover ratio measures how quickly a company is able to collect payments from its customers, indicating its ability to generate cash flow and reducing the risk of bad debts. This is an important factor in assessing a company's liquidity. The other options, return on equity, fixed asset turnover ratio, and times interest earned ratio are measures of profitability, asset utilization, and debt coverage, respectively, but do not directly relate to liquidity.

Which of the Following Measures Would Assist in Assessing the Liquidity