Liquidity of a company is generally defined as a measure of:
A)the ability of a company to pay its employees in a timely manner.
B)the ability to pay interest and principal on all debt.
C)the ability to pay dividends.
D)the ability to pay current liabilities.

Question

Quizplus · Accepted Answer

Liquidity of a company refers to its ability to pay its current liabilities, i.e. debts that are due within a year. Options A, B, and C are partial aspects of liquidity but are not comprehensive enough.

Liquidity of a Company Is Generally Defined as a Measure