Introduction to Accounting

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Liquidity ratios measure:

a. how effectively a company is using its equity

b. how effectively a company is using it libilities

c. a company's ability to pay shareholder

d. a companys ability to pay off short-term debts

Feb 21st, 2015

d. a companys ability to pay off short-term debts

reference

  1. Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. This is done by comparing a company's most liquid assets (or, those that can be easily converted to cash), its short-term liabilities.

  1. www.investopedia.com/university/ratios/liquidity-measurement/



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