Examveda
Examveda

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

D. Proprietary ratio

Answer: Option C

Solution(By Examveda Team)

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.

Join The Discussion

Related Questions on Accounting