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Registered Dietitian

Category - Management

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An organization might use a liquidity ratio to:

Estimate the time frame for paying off long-term debt
Determine the ratio of cash and accounts receivable to amounts owed
Estimate the organization’s ability to pay off short-term debt
Calculate operating costs for a new program project

Explanation

Answer: C - An organization might use a liquidity ratio to estimate their ability to pay off short-term debt. The liquidity ratio is calculated by dividing liquid assets by total assets.

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