Which of the Following Ratios Does NOT Measure Liquidity

question 38

Multiple Choice

Which of the following ratios does NOT measure liquidity?

• A) Net cash flow to current liabilities
• B) Working capital to total assets
• C) Current ratio
• D) Quick ratio

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Definitions:

Statutory Lien

A legal claim on property, either personal or real, granted by law to creditors as security for a debt or obligation.

Debtor

An individual or entity that owes money or is in debt to another party.

Composition Agreement

An arrangement between a debtor and their creditors in which the creditors agree to accept a partial payment in satisfaction of the debts owed.

Creditors

Creditors are individuals or entities that are owed money by another entity or individual, known as a debtor.