Question

Which of the following is not a category of ratios used to evaluate a company’s performance...

Which of the following is not a category of ratios used to evaluate a company’s performance

a

Liquidity ratios
b

Market value ratios
c

Capital ratios
d

Asset management ratios
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Answer #1

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Market value ratios, Capital ratios, Asset management ratios help to measure the company's performance.

Liquidity means the ability of the business to pay its short-term liabilities.

liquidity ratio measures the working capital management and short term ability of the company to meets is liabilities.

For example:

The current ratio measures the liquidity of the firm. The higher the current ratio, the better the liquidity is.

Current ratio = current Assets/current liabilities.

Hence, liquidity ratio is not a category of ratios used to evaluate a company's performance.

Answer: Liquidity ratio.

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