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What does liquidity ratio measure?

What does liquidity ratio measure?
Take Free Practice Test On 2026 JAMB UTME, Post UTME, WAEC SSCE, GCE, NECO SSCE
  • 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
Explanation:
liquidity ratio attempt to measure the ability to meet up with current obligations e.g. current ratio which measures the current asset to current liabilities.

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