Which of the following is an example of a liquidity measure?

The current ratio is an example of a liquidity measure because it assesses a company's ability to cover its short-term liabilities with its short-term assets. Specifically, the current ratio is calculated by dividing total current assets by total current liabilities. A higher current ratio indicates that the company is in a better position to meet its immediate financial obligations, thereby reflecting its liquidity position.

Liquidity measures are important as they provide insights into a company's short-term financial health. In contrast, the debt-to-equity ratio evaluates the company's financial leverage by comparing its total liabilities to its shareholders' equity, which is not directly related to liquidity. The profit margin assesses profitability by indicating how much of every dollar earned translates into profit, and return on assets measures overall efficiency and profitability based on asset utilization, neither of which are directly concerned with the company's ability to pay short-term obligations.