Practicing Success
There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below. Assertion (A): Long-term financial position of a firm is assessed from Liquidity Ratios. |
Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A). Assertion (A) and Reason (R) are correct but the Reason (R) is not the correct explanation of Assertion (A). Both Assertion (A) and Reason (R) are not correct. Only Assertion (A) is correct. |
Both Assertion (A) and Reason (R) are not correct. |
Liquidity ratios are financial metrics that measure a company's ability to meet its short-term financial obligations promptly. They provide insights into the company's liquidity position and its ability to convert assets into cash to pay off short-term debts. The two most commonly used liquidity ratios are the Current Ratio and the Quick Ratio (also known as the Acid-Test Ratio). |