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Which one of the following would not be considered a liquidity ratio?

1. Current ratio
2. Inventory turnover
3. Average collection period
4. Return on assets

Sagot :

GinnyAnsweridn

Final answer:

Liquidity ratios assess an organization's ability to meet short-term obligations. Return on assets is not a liquidity ratio.


Explanation:

Liquidity ratios measure an organization's ability to cover its day-to-day expenses using liquid resources. Out of the given options, return on assets would not be considered a liquidity ratio because it focuses on profitability rather than liquidity.


Learn more about financial ratios here:

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