Explanation:

• Option A (Cash conversion cycle): Incorrect. This metric represents the time elapsed from when a company invests in working capital until it collects cash. It does not assess the ability of liquid assets to cover daily cash expenditures.

• Option B (Defensive interval ratio): Correct. This ratio specifically measures how long a company can continue to meet its daily cash expenditures using its existing liquid assets, without relying on additional cash inflows.

• Option C (Fixed charge coverage ratio): Incorrect. This ratio evaluates the extent to which a company's earnings can cover its fixed obligations, such as interest and lease payments. It does not address the coverage of daily cash expenditures by liquid assets.

Learning Outcome: Calculate and interpret activity, liquidity, solvency, and profitability ratios.