Which of the Following Ratios Is an Indicator of Liquidity

question 132

Multiple Choice

Which of the following ratios is an indicator of liquidity?

• A)The Debt-to-Total Assets Ratio.
• B)The Inventory Turnover Ratio
• C)The Current Ratio.
• D)The Age of Receivables Ratio.

---

Definitions:

Compounded Annually

A system of calculating interest where the accumulated interest is added to the principal at the end of each year, resulting in interest earning interest in subsequent periods.

Compounded Quarterly

A method of calculating interest where the accumulated interest is added to the principal amount at the end of each quarter, leading to interest being earned on interest.

Compound Interest

Interest on a loan or deposit calculated based on both the initial principal and the accumulated interest from previous periods.

Future Value

The worth of a present asset on a future specified date, calculated using a projected growth rate.