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

Question

Quizplus · Accepted Answer

Liquidity ratios are financial metrics used to determine a company's ability to pay off its short-term debts obligations. Thus, they measure the short-term financial health of a company, specifically its ability to meet its maturing obligations and handle unexpected cash needs.

A Liquidity Ratio Measures the