The Current Ratio and Inventory Turnover Ratio Measure the Liquidity

question 101

True/False

The current ratio and inventory turnover ratio measure the liquidity of a firm.The current ratio measures the relation of a firm's current assets to its current liabilities and the inventory turnover ratio measures how rapidly a firm turns its inventory back into a "quick" asset or cash.

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Definitions:

Consolidated Statements

Consolidated statements are financial reports that combine the financial results of a parent company and its subsidiaries, presenting the financial position and performance of the entire group as a single entity.

Future Date

A specific date that is in the period after the current date, often referenced in contracts or future planning.

U.S. Dollars

The official currency of the United States, widely used as a standard of exchange in international transactions.

U.S. Dollar

The U.S. Dollar is the official currency of the United States, widely used as a benchmark in international trade and as a global reserve currency.