Q282
Which of the following ratios indicate the short-term liquidity of a business?
A.
Inventory turnover ratio
B.
Debt equity ratio
C.
Acid test ratio
AnswerD.
Proprietary ratio
Answer: Option C
Solution
Answer: Option C
Solution:
Acid test ratios indicate the short-term liquidity of a business. The acid-test ratio uses a firm's balance sheet data as an indicator of whether it has sufficient short-term assets to cover its short-term liabilities.