What does liquidity ratio measure?

Accounts - Principles of Accounts

JAMB 2015

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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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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What does liquidity ratio measure?

Correct Answer: Option B

Explanation

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