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easyMCQCUET 2025 31 May Shift 12026CUET Accountancy
1 mark

The two basic measures of liquidity are:

  1. A
    Inventory turnover and current ratio
  2. B
    Current ratio and quick ratio
  3. C
    Gross profit margin and operating ratio
  4. D
    Current ratio and average collection period

Solution & Step-by-step Explanation

Liquidity ratios measure an organization's capacity to fulfill short-term financial obligations. The two foundational short-term liquidity metrics are the Current Ratio (Current Assets / Current Liabilities) and the Quick Ratio (also known as the Acid Test Ratio or Liquid Ratio).

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The two basic measures of liquidity are:
A
Inventory turnover and current ratio
B
Current ratio and quick ratio
C
Gross profit margin and operating ratio
D
Current ratio and average collection period

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Financial StatementsRatiosLiquidity Measures

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