Question: Leverage measures DO NOT: 1. Determine repayment ability. Il. Indicate if asset and liability levels are appropriate. Ill. Measure cash flow. IV. Provide a means

Leverage measures DO NOT:

1. Determine repayment ability. Il. Indicate if asset and liability levels are appropriate. Ill. Measure cash flow. IV. Provide a means of gauging the degree of risk associated with lending to the company

When assessing the liquidity of a company, which of the following is the most conservative measure?

A. Net working capital

B. Quick ratio

c. Current ratio

D. Working capital/sale

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