Which of the Following Ratios Is Used to Estimate the Liquidity

question 76

Multiple Choice

Which of the following ratios is used to estimate the liquidity of a business?

• A) Inventory turnover ratio
• B) Total assets to total liabilities ratio
• C) Current ratio
• D) Quick ratio

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Definitions:

Geographical Restriction

Limitations placed on where a business can operate or where a person can live or work, often found in contracts or legal agreements.

Severable

Describes contract clauses that can be legally separated or isolated from the rest of the contract, allowing for parts of the contract to be invalidated or enforced independently.

Multiple Parts

Consisting of several components, elements, or sections that contribute to a whole.

Adhesion

A contractual term referring to agreements that are not negotiable and are offered on a "take it or leave it" basis by one party to another.