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Significance of Ratios

ratios descri...

Question

ratios describes about the ability of the company to meet its short term financial needs.

A

Financial

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B

Liquidity

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C

Costing

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D

Accounting

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Solution

The correct option is B Liquidity
Liquidity ratio shows that whether a company's currents assets are sufficient to meet its current liability or company is able to meet its short term financial obligation.

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Q. ratio describes the ability of a business to meet its financial obligations in the long run.

Q. The ability of a company to meet its short-term obligations known as .

Q. Which of the following, in the banking sector, measures the ability of a company to meet its short term debt obligations?

Q. Assertion :Current ratio shows the ability of the firm to meet its short-term obligations. Reason: Current ratio is also used in inventory valuation.

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