Which of the following is a liquidity measure?

The Acid Test Ratio is indeed a liquidity measure because it assesses a company's ability to meet its short-term obligations using its most liquid assets. Unlike other financial metrics that evaluate profitability or investment return, the Acid Test Ratio focuses specifically on a firm’s capacity to pay off its current liabilities without relying on inventory sales. This ratio is particularly significant because it provides a more stringent assessment of liquidity than the current ratio, which includes inventory in its calculation. By using cash, cash equivalents, and receivables in the numerator, it ensures that only the most liquid assets are considered, making it a reliable indicator for stakeholders who are concerned about the company's short-term financial health.

In contrast, the other choices are focused on profitability measures rather than liquidity. Return on Investment, Gross Profit Margin, and Net Profit Margin all provide insights into different aspects of a company’s profitability and operational efficiency but do not address the availability of liquid assets to meet immediate financial obligations.