Target Exam

CUET

Subject

Business Studies

Chapter

Controlling

Question:
What is true of Liquidity ratios?
Options:
Liquidity ratios are calculated to determine medium-term solvency of business.
Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders.
Both 1 and 2
None of the above
Correct Answer:
Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders.
Explanation:
Liquidity Ratios: Liquidity ratios are calculated to determine short-term solvency of business. Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders.