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Identify which of the following are normally computed to identify the liquidity of the Business? (A) Proprietary Ratio (B) Interest Coverage Ratio
Question

Identify which of the following are normally computed to identify the liquidity of the Business?
(A) Proprietary Ratio
(B) Interest Coverage Ratio
(C) Quick Ratio
(D) Debt Equity Ratio
(E) Current Ratio
Choose the correct answer from the options given below:

A.

(C) and (E) only

B.

(A), (C) and (E) only

C.

(A), (B) and (C) only

D.

(B), (D) and (E) only

Correct option is A

The liquidity of a business is typically assessed using the Quick Ratio and Current Ratio. The Quick Ratio measures the ability to meet short-term obligations with its most liquid assets, while the Current Ratio assesses the ability to pay short-term and long-term obligations.

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