A common measure of liquidity is a. the accounts receivable turnover. b. dividends per share of common stock. c. the asset turnover ratio. d. the profit margin.

Question

Business

Guest

20 September, 14:05

A common measure of liquidity is a. the accounts receivable turnover. b. dividends per share of common stock. c. the asset turnover ratio. d. the profit margin.

+2

Answers (1)

Know the Answer?

Lawrence Bernard · Answer 1

The correct answer is letter "A": the accounts receivable turnover.

Explanation:

The liquidity of an asset reflects the ease with which it can be transformed into cash. The Receivables Turnover Ratio is an accounting measure used to quantify the effectiveness of the firm in both extending credits and collecting debt out of the company's sales. The Receivables Turnover Ratio is calculated by dividing the net sales by the average accounts receivable.