Which one of the following is NOT a liquidity activity ratio?
A) days to collect receivables ratio
B) inventory turnover ratio
C) days to sell inventory ratio
D) time interest earned ratio

Question

Quizplus · Accepted Answer

The time interest earned ratio is not a liquidity activity ratio, but rather a solvency ratio that measures a company's ability to pay interest expenses on its debt. The other options are all liquidity activity ratios that focus on a company's ability to convert assets into cash or quickly generate cash to meet short-term obligations.

Which One of the Following Is NOT a Liquidity Activity