Which of the following ratios useful in assessing the liquidity position of a company?

Incorrect A.

Both defensive-interval ratio and return on stockholders' equity

B.

Defensive-interval ratio only

C.

Return on stockholders' equity only

D.

Neither defensive-interval ratio nor return on stockholders' equity

The option B is a correct answer which is useful in assessing the liquidity position of a company.

Explanation:

Defensive Interval Ratio:

The defensive interval ratio (DIR) is that ratio which measures that by how many days can company operate without fixed assets or non current assets.

It is a type of liquidity ratio which shows that company can pay its current obligations without impacting long term obligations. It is always display in days.

Return on Stockholders' equity:

The return on stockholder equity is a profitability ratio which represents how much the company is earning profit during a particular period.

Liquidity ratio:

The liquidity ratio is that ratio which shows the relationship between current assets and current liabilities. It describes that how the company can meet its short term obligations with its available current assets.

Thus, by above explanation it is clear that the option B is a correct answer which is useful in assessing the liquidity position of a company.