If your liquidity ratio is 1.50,you have
A)$1.50 in liquid assets for $1.00 of take-home pay.
B)$1.50 in liquid assets for $1.00 of current liabilities.
C)$1.50 in liquid assets for $1.00 of total liabilities.
D)$1.50 in liquid assets for $1.00 of total assets.

Question

Quizplus · Accepted Answer

The liquidity ratio is calculated by dividing liquid assets by current liabilities. Therefore, a liquidity ratio of 1.50 means that for every $1.00 of current liabilities, there is $1.50 in liquid assets available to cover those liabilities. Choice B correctly reflects this relationship.

If Your Liquidity Ratio Is 1.50,you Have