A company's liquidity can be evaluated using all of the following ratios EXCEPT ________.
A) Return on assets ratio
B) Acid-test ratio
C) Accounts receivable turnover
D) Days' sales in receivables

Question

Quizplus · Accepted Answer

Return on assets ratio measures how efficiently a company is generating profits from its assets. It does not provide information on a company's liquidity, which is the ability to meet its short-term obligations. The other three ratios listed (acid-test ratio, accounts receivable turnover, and days' sales in receivables) all give insight into a company's liquidity.

A Company's Liquidity Can Be Evaluated Using All of the Following