Each of the following is a liquidity ratio except the
A) acid-test ratio.
B) current ratio.
C) debt to total assets ratio.
D) inventory turnover.

Question

Quizplus · Accepted Answer

Both the acid-test ratio and current ratio are liquidity ratios that measure a company's ability to pay off short-term debt obligations. Inventory turnover is an efficiency ratio that measures how quickly a company is able to sell its inventory. The debt to total assets ratio is a solvency ratio that measures the proportion of a company's assets that are financed with debt. Therefore, the only option that is not a liquidity ratio is C, the debt to total assets ratio.

Each of the Following Is a Liquidity Ratio Except the