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________ is a measure of an organization's ability to meet its current debt obligations.

A) Profitability
B) Liquidity
C) Activity
D) Leverage

Marked as best answer by Federico70


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Answer: D
Explanation: Leverage, the ratio of total debt to total assets, is a measure of how much debt a company acquires to finance its assets, making that choice the correct response. Profitability, the ratio of net after-tax profits to total sales, is a measure of how good a company is at using its assets to generate profits. Liquidity, the ratio of current assets to current liabilities, is a measure of an organization's ability to meet its debt payments. Activity, the ratio of sales to inventory, is a measure of how well a company uses its assets.

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