When financial managers are concerned about the ability to pay off debts that will come due in the next year,they are likely to focus on which of the following?
A)incremental analysis
B)liquidity ratios
C)capital budgets
D)leverage ratios

Question

Quizplus · Accepted Answer

When financial managers are concerned about the ability to pay off debts that will come due in the next year, they are likely to focus on liquidity ratios. These ratios measure a company's ability to meet its short-term obligations and assess its liquidity. Examples of liquidity ratios include current ratio, quick ratio, and cash ratio. These ratios help managers understand the company's ability to meet its short-term obligations and make informed decisions to improve liquidity.

When Financial Managers Are Concerned About the Ability to Pay