Which of the following is an example of a liquidity ratio?
A)Times interest earned (TIE)
B)P/E ratio
C)Return on equity
D)Quick ratio

Question

Quizplus · Accepted Answer

The quick ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its most liquid assets, such as cash and marketable securities. Option A (Times interest earned) is a solvency ratio that measures a company's ability to meet its long-term debt obligations. Option B (P/E ratio) is a valuation ratio that compares a company's stock price to its earnings per share. Option C (Return on equity) is a profitability ratio that measures the amount of net income generated as a percentage of shareholders' equity.

Which of the Following Is an Example of a Liquidity