[Solved] The primary purpose of the liquidity ratios is to determine

McqMate

Q.	The primary purpose of the liquidity ratios is to determine
A.	how much working capital is tied up in inventory?
B.	the relative level of short-term debt.
C.	how well a firm is able to pay off short-term obligations?
D.	more than one of the above.
Answer» C. how well a firm is able to pay off short-term obligations?

1.2k

0

Do you find this helpful?

6

View all MCQs in

Analysis of Financial Statements

Discussion

No comments yet

Related MCQs

Liquidity ratios are expressed in
Which of the following statements about liquidity ratios is true?
The most precise test of liquidity is
__________ analysis is the process of studying a series of ratios for a company and/or industry over time.
General profitability ratios are based on
The ratios which reveal the final result of the managerial policies and performance is .
The ________ ratios help determines the degree of financial risk and earnings volatility present in a firm.
Determine Working capital turnover ratio if, Current asset is Rs 1,50,000, current liability is Rs 1,00,000 & cost of goods sold is Rs 3,00,000.
Determine stock turnover ratio if, Opening stock is Rs 31,000 , Closing stock is Rs 29,000, Sales is Rs 3,20,000 & Gross profit ratio is 25% on sales.
Quick ratio is 1.8:1, current ratio is 2.7:1 and current liabilities are Rs 60,000. Determine value of stock.