Question

Which of the following would be considered liquidity or short-term solvency ratios? quick ratio; cash ratio....

Which of the following would be considered liquidity or short-term solvency ratios?

  • quick ratio; cash ratio.

  • quick ratio; times interest earned ratio (TIE).

  • current ratio; long-term debt ratio.

  • current ratio; inventory turnover ratio;

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Answer #1

Quick ratio and cash ratio would be considered liquidity or short-term solvency ratios.

These two ratio's are an indicator of a company's short term liquidity position and measures a company's ability to meet its short-term obligations with its most liquid assets.

Option 'A' is correct

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