Which Ratio Measures the Ability to Pay Short-Term Liabilities as They

question 56

Multiple Choice

Which ratio measures the ability to pay short-term liabilities as they come due?

• A) leverage ratio
• B) liquidity ratio
• C) profitability ratio
• D) asset management ratio

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Definitions:

External Environment

Refers to factors outside of an organization that can impact its operation and success, including economic, political, social, technological, and legal factors.

Strategy Success

The achievement of predetermined objectives and goals through the effective implementation of a plan.

Performance Determinant

A factor that significantly influences the outcome or level of performance in a task or activity.

Process Reliability

The extent to which a process consistently produces the same results over time, ensuring stability and predictability in its outcomes.