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

Melody Meza

Business

23 August, 01:15

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.

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Answers (1)

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Taffy · 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.