Which measure indicates the ratio of liquid assets to current liabilities?

The measure that indicates the ratio of liquid assets to current liabilities is the Quick Asset Ratio. This ratio is essential for assessing a company's ability to meet its short-term obligations with its most liquid assets, specifically cash, marketable securities, and receivables. By focusing on liquid assets, the Quick Asset Ratio provides a more stringent measure of liquidity than other ratios, such as the Working Capital Ratio, which includes all current assets.

This ratio is particularly valuable in assessing a company's financial health during times of economic uncertainty or financial distress, as it excludes inventories, which may not be quickly convertible to cash. A higher Quick Asset Ratio suggests that a company can more easily cover its short-term liabilities, indicating good liquidity management.