Which of the following ratios are particularly interesting to shortterm creditors?
Correct answer: A. Liquidity Ratios
- A. Liquidity Ratios
- B. Long-term Solvency Ratios
- C. Profitability Ratios
- D. Market Value Ratios
Explanation
Short-term creditors focus on whether a business can meet near-term obligations, which is measured by liquidity ratios such as the current ratio and quick ratio. Solvency ratios mainly assess longer-term financial risk.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
Practise Business Finance
975 free Business Finance MCQs from Management Sciences, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Management Sciences questions like this
Management Sciences is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Business Finance questions
In which form of Business, owners have limited liability?
Which of the following item provides the important function of shielding part of income from taxes?
The process of determining the present value of a payment or a stream of payments that is to be received in the future is known as:
You just won a prize, you can either receive Rs. 1000 today or Rs. 1,050 in one year. Which option do you prefer and why if you can earn 5 percent on your money?
Which of the following is a special case of annuity, where the stream of cash flows continues forever?
Quick Ratio is also known as_________?