Liquidity Ratios Address the Question of Whether a Company Can

question 21

True/False

Liquidity ratios address the question of whether a company can meet its obligations over the long term,and financial leverage ratios address the question of whether a company can meet its obligations over the short term.

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Definitions:

Discharge

The completion, termination or nullification of a legal obligation or duty.

Obligations

Duties or responsibilities imposed by law, contract, or moral principals.

Contract

A legally enforceable agreement between two or more parties with mutual obligations.

Terminated

Ended or concluded, often referring to the cessation of employment, contracts, or legal agreements.