Which of the Following Measures a Company's Liquidity and Its

question 106

Multiple Choice

Which of the following measures a company's liquidity and its ability to pay its bills and other financial obligations on time?

• A)Cash budget
• B)Cash flow
• C)Cash management
• D)All of the above

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Definitions:

Price Per Share

The current market price of a company's share, reflecting what investors are willing to pay for one share of the company's stock.

Current Ratio

An indicator of a business's capability to settle obligations due within a year, measuring its immediate financial solvency.

Quick Ratio

A measure of a company's ability to meet its short-term obligations with its most liquid assets, calculated by subtracting inventories from current assets, then dividing by current liabilities.

Accounts Receivable

Amounts owed to a company by customers for goods or services delivered on credit.