Which of the following financial ratios shows the company's liquidity?

A.

Debt to equity ratio

B.

Current ratio

C.

Debt ratio

D.

Return on equity

The B) Current ratio shows the company's liquidity. The current ratio calculated by dividing company's amount of current asset by company's current liability. This ratio shows the ability of a company's current asset to meet its current liability. Managers usually use benchmarks for the similar industry in analyzing this ratio.