L4M4 Exam Dumps | A company has a requirement for an item that has been identified as strategic on the positioning model.

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CIPS.L4M4.v2025-11-05.q105
Question 87

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Question 87/105

A company has a requirement for an item that has been identified as strategic on the positioning model. The company needs to invite competitive tenders and ensure the selected supplier of this item is in a good financial position. What should the company ask the suppliers to send to show that their current assets cover their current liabilities?

A. Profit and loss account

B. Annual turnover

C. Gearing ratio

D. Acid test

Correct Answer: D

The acid test (quick ratio) is an effective measure of a supplier's ability to meet short-term liabilities, providing insights into financial stability. This aligns with responsible sourcing by ensuring the supplier is financially capable of fulfilling a strategic contract.

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