A liquidity ratio measures the income or operating success o

A liquidity ratio measures the income or operating success of an enterprise over a period of time. ability of the enterprise to survive over a long period of time. short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash. number of times interest is earned.

Solution

Answer : - short term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash

liquidty refers to the availabilty of cash for current cash requirenments.More the liquidity higher is the asset value of entity. Liquid assets are fixed deposits, cash, bank, inventory etc. These asset can be instantly realised in the market and can be used to pay off immediate liabilities.