Accounting JAMB

What does liquidity ratio measure?

A. measures operating efficiency of a company
B. measures the ability of a company to meet its current obligations.
C. measures the value of investments of a company
D. measures the financial leverage of a company

Correct Answer:

Option B – measures the ability of a company to meet its current obligations.

Explanation

Liquidity ratio attempts to measure the ability to meet up with current obligations e.g. current ratio which measures the current asset to current liabilities.

Sunday

Share
Published by
Sunday
Tags: Accounting

Recent Posts

List of Universities Offering Veterinary Medicine in Nigeria

Veterinary medicine is the branch of medicine that deals with the prevention, diagnosis, and treatment…

2 months ago

List of Universities Offering Anthropology in Nigeria

Anthropology is the scientific study of human beings and their cultures. It encompasses a wide…

2 months ago

List of Universities Offering Sociology in Nigeria

Sociology is the scientific study of human society, culture, and behavior. It examines the social…

2 months ago

List of Universities Offering Social Work in Nigeria

Social Work is a profession dedicated to helping individuals, families, and communities to cope with…

2 months ago

List of Universities Offering Religious Studies in Nigeria

Religious studies is an academic discipline that explores the beliefs, practices, and history of various…

2 months ago

List of Universities Offering Public Administration in Nigeria

Public administration is the field of study and practice that focuses on the organization and…

2 months ago