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25 August, 19:22

Which of the following financial ratios shows the company's liquidity?

A.

Debt to equity ratio

B.

Current ratio

C.

Debt ratio

D.

Return on equity

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Answers (1)
  1. 25 August, 19:29
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    The B) Current ratio shows the company's liquidity. The current ratio calculated by dividing company's amount of current asset by company's current liability. This ratio shows the ability of a company's current asset to meet its current liability. Managers usually use benchmarks for the similar industry in analyzing this ratio.
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