The correct answer is: D. All of the above
Liquidity is a company’s ability to meet its short-term obligations. Solvency is a company’s ability to meet its long-term obligations. Relative risk is a measure of how risky a company is compared to other companies.
A company’s financial health is important because it affects its ability to borrow money, attract investors, and pay its employees and suppliers. A company with good financial health is more likely to be able to weather economic downturns and continue to operate successfully.
Liquidity is important because it allows a company to meet its short-term obligations, such as paying its bills and employees. A company with good liquidity is less likely to have to go into debt to meet its obligations, which can save it money in the long run.
Solvency is important because it allows a company to meet its long-term obligations, such as repaying its debts. A company with good solvency is less likely to go bankrupt, which can protect its investors and employees.
Relative risk is important because it allows investors to compare the risk of investing in different companies. A company with low relative risk is less risky than a company with high relative risk.
Therefore, all of the above factors are important in measuring a company’s financial health.