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Chartered Financial Analyst Level 1

Chartered Financial Analyst Level 1

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Which of the following is most likely a measure of a company's ability to meet its short-term obligations?

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Explanation:

Explanation:

The correct answer is A. Quick ratio, as it is a liquidity ratio that assesses a company's capacity to fulfill its short-term obligations using its most liquid assets.

  • Option B (Operating profit margin) is incorrect because it is a profitability ratio, reflecting a company's ability to generate earnings from its operations, not its short-term liquidity.

  • Option C (Days of payables outstanding) is also incorrect, as it is an activity ratio that measures the efficiency of a company's payables management, not its liquidity position.

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