In examining the liquidity ratios, the primary emphasis is the firm's
A)ability to effectively employ its resources.
B)overall debt position.
C)ability to pay short-term obligations on time.
D)ability to earn an adequate return.

Question

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Liquidity ratios are measures of a company's ability to meet its short-term obligations. Therefore, the primary emphasis of liquidity ratios is the firm's ability to pay short-term obligations on time. Examples of liquidity ratios include the current ratio and the quick ratio.

In Examining the Liquidity Ratios, the Primary Emphasis Is the Firm's