Which of the following is a measure of the liquid position of a corporation?
A)Earnings per share
B)Inventory turnover
C)Current ratio
D)Number of times interest charges earned

Question

Quizplus · Accepted Answer

The current ratio measures the liquidity position of a corporation by comparing its current assets (such as cash and inventory) to its current liabilities (such as accounts payable and short-term debt). A higher current ratio indicates that the company is in a better position to meet its short-term financial obligations. Earnings per share, inventory turnover, and number of times interest charges earned are measures of profitability, asset efficiency, and debt-servicing capacity, respectively, but are not direct measures of liquidity.

Which of the Following Is a Measure of the Liquid