Which of the following ratios does NOT measure liquidity?
A) Net cash flow to current liabilities
B) Working capital to total assets
C) Current ratio
D) Quick ratio

Question

Quizplus · Accepted Answer

Net cash flow to current liabilities measures a company's ability to meet its short-term debt obligations using its cash flow from operations, which is unrelated to liquidity. The other options measure liquidity, with the current ratio and quick ratio specifically measuring a company's ability to pay off its short-term liabilities using its current assets. Working capital to total assets measures the ability to fund operations using its total assets.

Which of the Following Ratios Does NOT Measure Liquidity