Question : The short-term solvency is which of the following?
Option 1: Debtors turnover ratio
Option 2: Liquid ratio
Option 3: Stock turnover ratio
Option 4: Price earning ratio
Correct Answer: Liquid ratio
Solution : Ratios including the current ratio, acid test ratio, inventory turnover ratio, and accounts receivable turnover ratio are used to determine if a company has enough liquid assets to cover short-term obligations when they become due. Hence option 2 is the correct answer.
Question : Which of the following shows the Long term solvency?
Question : The liquidity ratio is also called________?
Question : Which of the following is the Capital Gearing Ratio?
Question : If the liquid ratio were 1.2:1, the money obtained from debtors would affect the liquid ratio?
Question : Which of the following tells long-term solvency?
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