Concept:Liquidity ratio measures the firm's short-term financial strength.Explanation:Liquidity ratios determine if a company can cover short-term debts using current assets.Current obligations are debts due within one year.A common example is the current ratio: CurrentAssets÷CurrentLiabilities.Hence, the ratio shows the ability to settle immediate financial commitments.Answer:Option B: It measures the ability of a company to meet its current obligations.