On the basis of the following information, answer the question.

To measure the short-term financial position.....................ratio can be calculated.

Current Ratio

Liquidity ratios are calculated to measure the short-term solvency of the business, i.e. the firm’s ability to meet its current obligations. These are analysed by looking at the amounts of current assets and current liabilities in the balance sheet. The two ratios included in this category are current ratio and liquidity ratio