Question : Which measure of liquidity often excludes the asset with the lowest liquidity?
Option 1: Current ratio, Bills receivable
Option 2: Liquidity ratio, Bills receivables
Option 3: Current ratio.Stock
Option 4: Liquid ratio and stock
Correct Answer: Liquid ratio and stock
Solution :
Liquidity ratios assess a company's ability to meet its short-term obligations. The liquidity ratios of a company determine how quickly it can convert its assets into cash and use it to pay its obligations.
It does not include stock and prepaid expenses.
Hence option 4 is the correct answer.

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