Question : A business firm's..................... is measured by its ability to meet its short-term obligations as they come due?
Option 1: Profitability
Option 2: Debt
Option 3: Liquidity
Option 4: None of the above
Answer (1)
24th Jan, 2024
Correct Answer: Liquidity
Solution :
The ability of a company to pay its short-term commitments when they become due is a measure of its liquidity.
The term "liquidity" refers to how rapidly an asset or security can be purchased or sold on the market without having any impact on the asset's price.
Hence 3 is the correct answer.
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