The ratios used to measure a firm's ability to meet its short-term obligations to creditors as they come due are called ______.

A) liquidity ratios
B) activity ratios
C) leverage ratios
D) profitability ratios

Liquidity Ratios

Financial ratios used to measure a firm’s ability to meet its short-term obligations to creditors as they come due.

Short-term Obligations

Financial liabilities that are due within one year, typically including accounts payable, short-term loans, and other debts.

Creditors

Individuals or institutions that lend money or extend credit to others and are owed repayment in the future.