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Financial Analysis MCQs

What is the purpose of measuring liquidity?

To determine if the firm is keeping enough cash on hand to pay accounts payable

To determine if the firm is investing their liquid assets to earn the highest return available

To measure a firm's ability to remain cash flow positive and meet its short-term obligations

To measure a firm's return on investment

Answer

Correct Answer: To measure a firm's ability to remain cash flow positive and meet its short-term obligations

Explanation:

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