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Which ratio is used to measure a company's short-term solvency or liquidity position?
  • a)
    Current ratio
  • b)
    Debt-equity ratio
  • c)
    Return on investment ratio
  • d)
    Price earning ratio
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Which ratio is used to measure a company's short-term solvency or liqu...
The current ratio is used to measure a company's short-term solvency or liquidity position. It compares current assets to current liabilities and indicates the firm's ability to meet its short-term obligations. A higher current ratio is generally considered favorable, as it suggests that the company has sufficient current assets to cover its current liabilities.
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Which ratio is used to measure a company's short-term solvency or liquidity position?a)Current ratiob)Debt-equity ratioc)Return on investment ratiod)Price earning ratioCorrect answer is option 'A'. Can you explain this answer?
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