A liquidity ratio measures the
A) number of times interest is earned.
B) short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.
C) ability of the company to survive over a long period of time.
D) earnings or operating success of a company over a period of time.

Question

Quizplus · Accepted Answer

A liquidity ratio measures a company's ability to meet its short-term obligations and unexpected cash needs. Choice A describes an interest coverage ratio, choice C describes a solvency ratio, and choice D describes a profitability ratio.

A Liquidity Ratio Measures the