Asked by Margot Rochester on Jul 17, 2024

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Financial ratios that measure the firm's ability to pay its bills over the short run without undue stress are known as:

A) Asset management ratios.
B) Long-term solvency ratios.
C) Short-term solvency ratios.
D) Profitability ratios.
E) Market value ratios.

Short-Term Solvency Ratios

Financial metrics used to measure a company's ability to meet its short-term obligations.

Financial Ratios

Financial Ratios are quantitative measures used to evaluate a company's financial performance by comparing two or more line items from financial statements.

Undue Stress

Excessive pressure or tension that can potentially lead to negative health or psychological effects.

  • Identify the differences among asset management, profitability, long-term solvency, and market value financial ratios.
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Khizra SaleemJul 18, 2024
Final Answer :
C
Explanation :
Short-term solvency ratios, also known as liquidity ratios, are designed to measure a company's ability to meet its short-term obligations. These include ratios like the current ratio and the quick ratio, which assess whether the firm has enough resources to cover its liabilities due within a year.