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What does liquidity ratio measure?

Accounts - Principles of Accounts
JAMB 2015

What does liquidity ratio measure?
  • A. measures operating efficiency of a company
  • B. measures the ability of a company to meet its current obligations.
  • C. measures the value of investments of a company
  • D. measures the financial leverage of a company
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Post-UTME Past Questions - Original materials are available here - Download PDF for your school of choice + 1 year SMS alerts
Correct Answer: Option B
Explanation
liquidity ratio attempt to measure the ability to meet up with current obligations e.g. current ratio which measures the current asset to current liabilities.

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