Liquidity represents the degree to which a firm can meet maturing short-term debt obligations with available working capital is true.
Liquidity represents the degree to which a firm can meet maturing brief-term debt responsibilities with to-be-had operating capital. The quality economic ratio to determine a business enterprise's potential to pay a debt is the debt ratio. A traditional measure of a company's liquidity is an evaluation of modern belongings to modern liabilities.
The measure of liquidity is the running coins flows ratio applied to estimate an entity's potential to meet its debt and the usage of the modern monetary stability of an accounting length.
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