Question

Liquidity ratio indicates that ability of the company to meet its.. ​

Answer 1

Answer:

Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt obligations.

They show the number of times the short term debt obligations are covered by the cash and liquid assets. If the value is greater than 1, it means the short term obligations are fully covered.

Answer 2

Answer:

The answer is short-term debt obligations.

Explanation:

• Liquidity ratios assess a company's capacity to satisfy its short-term debt obligations. The commonly used liquidity ratios exist as the current ratio, OWC/Sales, and the cash ratio. The current ratio exists computed as Current Assets/Current Liabilities. A current ratio of less than 1 exists cause for worry.
• Short-term debt is defined as debt obligations that exist due to being paid either within the next 12-month period or the current fiscal year of a business. Short-term debts are even referred to as current liabilities. They can be seen in the liabilities amount of a company's balance sheet.
• Hence, The answer is short-term debt obligations. '

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