Which of the following is not a liquidity measure?

The gross margin is a profitability measure that indicates the portion of revenue that exceeds the cost of goods sold (COGS). It is calculated by taking the difference between sales revenue and COGS, divided by the sales revenue, typically expressed as a percentage. This metric is focused on how efficiently a company can produce and sell its products, rather than its ability to meet short-term financial obligations.

In contrast, liquidity measures like the current ratio, quick ratio, and working capital focus specifically on a company's capacity to cover its short-term liabilities with its short-term assets. The current ratio assesses the proportion of current assets to current liabilities, providing insight into overall liquidity. The quick ratio, a more stringent measure, excludes inventory from current assets to give a clearer view of a company's liquid assets available for covering current obligations. Meanwhile, working capital simply represents the difference between current assets and current liabilities, indicating the amount of capital available for day-to-day operations.

By understanding this distinction, it becomes clear why the gross margin is not a liquidity measure, as it does not provide insight into a company's short-term financial health.