Which of the following ratios is used to analyze liquidity? a. Earnings per share. b. Debt-to-assets. c.
Question:
Which of the following ratios is used to analyze liquidity?
a. Earnings per share.
b. Debt-to-assets.
c. Current ratio.
d. Both b and c.
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Step by Step Answer:
The correct answer is c Current ratio The current ratio is a liquidity ratio that measures a companys ability to pay shortterm and longterm obligations The current ratio is calculated by dividing current assets by current liabilities A companys ability to pay its obligations is important to creditors investors and employees Creditors want to know if a company ...View the full answer
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Related Book For 
Fundamentals Of Financial Accounting
ISBN: 9781265440169
7th Edition
Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby
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