Question

What type of ratio measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue

Answer 1

The Current Ratio ("Banker's Ratio) measures a firm's ability to generate cash to meet current obligations by selling inventory and collecting revenue.

What is bankers ratio?

A company's debt-to-equity ratio reveals how much debt it has for every dollar of shareholder equity. This ratio was developed by bankers. If you are eligible for a loan, a bank will assess your debt-to-equity ratio in comparison to others in your sector. Your risk is high if this ratio is high.

Why do bankers use ratio analysis?

The majority of ratios may be computed using financial statements, and they are used to compare a company's financial performance to that of its competitors and to identify trends in those performances. Businesses should compute these ratios on their own to discover areas for improvement before approaching a credit institution.

To know more about bankers ratio visit:

brainly.com/question/27555735

#SPJ4