Question

Each of the following is a liquidity ratio except the

acid-test ratio.

current ratio.

inventory turnover.

debt to total assets ratio.

Answer 1

Each of the following is a liquidity ratio except the inventory turnover. All
liquidity ratios focus on a firm's ability to pay its short-term debt
obligations that means focus on the firm's current assets and current
liabilities on the balance sheet. Otherwise inventory turnover is the activity /
efficiency ratio and it measures how many times per period a business sells and
replaces its inventory again.