Which of the Following Is True of the Liquidity Ratio

question 5

Multiple Choice

Which of the following is true of the liquidity ratio?

• A) It indicates how easily an organization's assets are converted into cash.
• B) It reflects an organization's ability to meet long-term financial obligations.
• C) It shows managers and investors how much return an organization is generating relative to its assets.
• D) It helps estimate an organization's ability to cover interest expenses on borrowed capital.
• E) It indicates the effectiveness of specific functional areas in an organization.

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Definitions:

Nurture

Refers to the environmental influences and factors that affect an individual's physical and psychological development.

Conception

The moment at which a sperm fertilizes an egg, beginning the process of embryonic development.

Replication

The process of repeating a research study or experiment to verify its findings under the same or similar conditions.

Quantitative Research

Research that provides data expressed with numbers, such as ranks or scales.