Which of the following measures the liquidity 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 a corporation's ability to pay off its short-term liabilities with its current assets. A high current ratio indicates good liquidity, while a low current ratio suggests poor liquidity. Earnings per share, inventory turnover, and number of times interest charges earned do not directly measure a corporation's liquidity position.

Which of the Following Measures the Liquidity Position of a Corporation