An investor in able inc. would like to understand able's availability of resources to pay its short-term cash requirements. this type of analysis is known as liquidity measure.
The measurement of indicators such as the current ratio, quick ratio, and operating cash flow ratio allows us to calculate liquidity ratios, which assess a company's capacity to satisfy debt obligations as well as its margin of safety.
The term "liquidity" describes how quickly or easily money may be raised to cover short-term obligations like bills. Liquid assets include those that can be easily sold, such as stocks and bonds.
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