Question 5 (1 point) Which is true regarding Liquidity Ratios: 1. They tell the extent a company is able to meet its long term debt commitment 2. They are important since a frequent number of business failures is a result of a lack of working capital and the inability to liquidate current assets readily 3. Of the working capital/current ratio and the quick ratio, also called the acid test the quick ratio is a more stringent test since it removes inventories which are not readily convertible to cash from current assets 4. A ratio of .85:1 means there is $1 of current assets to meet each 85 cents of liabilities 2 and 3 1 and 3 all 1, 3, and 4