The correct answer is: D. All of the above
Liquidity is a measure of a company’s ability to pay its short-term debts. It is calculated by dividing a company’s current assets by its current liabilities. A higher current ratio indicates that a company is more liquid, or has more assets that can be quickly converted into cash to pay its debts.
The acid test ratio, also known as the quick ratio, is a measure of a company’s ability to pay its short-term debts without relying on the sale of its inventory. It is calculated by dividing a company’s quick assets by its current liabilities. Quick assets are a company’s current assets excluding inventory. A higher quick ratio indicates that a company is more liquid, or has more assets that can be quickly converted into cash to pay its debts.
The cash to current assets ratio is a measure of a company’s ability to pay its short-term debts with cash on hand. It is calculated by dividing a company’s cash and cash equivalents by its current liabilities. A higher cash to current assets ratio indicates that a company is more liquid, or has more cash on hand to pay its debts.
In conclusion, all of the ratios listed in the question can be used to measure a company’s liquidity.