Using the provided information, what is the company's liquidity ratio?

The liquidity ratio is a measure of a company's ability to cover its short-term obligations with its most liquid assets. Common liquidity ratios include the current ratio and quick ratio; each provides insight into the financial health of a business.

In this case, the liquidity ratio calculated as 2 indicates that for every dollar of current liabilities, the company has two dollars in current assets. This is significant because it suggests strong liquidity; the company is well-positioned to meet its short-term financial obligations. A liquidity ratio of 2 typically reflects solid financial health, as it indicates ample coverage of current liabilities without financial strain.

While other values suggesting lower ratios could imply varying levels of liquidity risk, the choice of 2 is advantageous as it demonstrates a robust cushion against unforeseen expenses or drops in revenue. Thus, the chosen answer accurately reflects a favorable position in terms of liquidity management.