Which of the following is considered a measure of short-term liquidity?
A) Gross profit percentage
B) Quick ratio
C) Dividend yield ratio
D) Return on assets ratio

Question

Quizplus · Accepted Answer

The quick ratio is considered a measure of short-term liquidity because it measures a company's ability to pay off its short-term liabilities with its most liquid assets (such as cash, accounts receivable, and marketable securities) without relying on the sale of inventory. The other ratios listed (gross profit percentage, dividend yield ratio, and return on assets ratio) are not necessarily indicative of a company's short-term liquidity.

Which of the Following Is Considered a Measure of Short-Term