Liquidity Ratios

Q.

Liquidity ratios are expressed in ___

1. Pure ratio form

2. %

3. Rate or times

4. None of these

Q. The ratio of liquid assets to current liabilities is called ratio.

1. current
2. liabilities
3. liquid
4. assets

Q.

Liquidity ratios are computed as the ratio of ____________ to the current liabilities.

1. current or liquid assets

2. current assets

3. non-current or liquid assets

4. liquid assets

Q.

What is the basic liquidity ratio?

Q.

Why do we calculate the liquidity ratio?

Q.

What are examples of liquidity?

Q. Liquidity ratios are used to evaluate the capability of an entity to meet its financial obligations.

1. past
2. current
3. future
4. absolute

Q. Which of the following groups of ratios shows the capability of an entity to meet its current financial obligations?

[0.88 marks]

1. Debt-to-equity ratio, interest coverage ratio, and proprietary ratio
2. Inventory turnover ratio and working capital turnover ratio
3. Current ratio and quick ratio
4. Gross profit ratio, net profit ratio, and return on investment

Q.

______________ means cash, cash equivalents and other assets which can be easily converted to cash.

1. Current Assets

2. Fixed Assets

3. Liquid Assets

4. Non-current Assets

Q. Answer the following in brief :

What is cash equivalent?

Q. The ability of the business to pay the amount due to stakeholders is calculated by ___________.

1. Activity ratios
2. Solvency ratios
3. Liquidity ratios
4. Profitability ratios

Q.

Liquidity ratios are used to evaluate the capability of an entity to meet its ____________________

1. None of these

2. current financial obligations

3. future financial obligations

4. past financial obligations

Q. Suppliers and Creditors of a firm are interested in ______.

1. Profitability Position
2. Market Share Position
3. Liquidity Position
4. Debt Position

Q. what does 4:1 liquid ratio indicate?

Q. Liquidity ratio are computed as the ratio of current or liquid assets to the current liabilities.

1. False
2. True