Which of the following groups of ratios primarily measure risk?
A) liquidity, activity, and profitability
B) liquidity, profitability, and market
C) liquidity, activity, and debt
D) activity, debt, and profitability

Question

Quizplus · Accepted Answer

Liquidity, activity, and debt ratios primarily measure a company's risk. Liquidity ratios assess a company's ability to meet short-term obligations, activity ratios evaluate how efficiently a company utilizes its assets, and debt ratios gauge the level of a company's financial leverage and its ability to repay long-term debt, all of which are directly related to the company's risk profile.

Which of the Following Groups of Ratios Primarily Measure Risk