Final answer:
Liquidity in business is assessed by the accounts receivable turnover ratio, which gauges how effectively a company is receiving payments for credit sales.
Explanation:
Liquidity is a measure of how quickly an asset can be converted into cash without significant loss in value. One common measure of liquidity used by analysts is the accounts receivable turnover ratio, which evaluates how efficiently a company is collecting on its credit sales. This ratio indicates the speed at which receivables are being converted into cash.
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