Types of Liquidity Ratios
June 27, 2021
A liquidity ratio is a type of financial ratio used to determine a company’s ability to pay its short-term debt obligations. The metric helps determine if a company can use its current, or liquid, assets to cover its current liabilities. 1. Current Ratio: Current Ratio = Current Assets / Current Liabilities The current ratio is the […]
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Liquidity Ratios
June 27, 2021
What are the liquidity ratios: Liquidity is a very critical part of a business. It is required for a business to meet its short-term obligations. Liquidity ratios are a measure of the ability of a company to pay off its short-term liabilities. Liquidity ratios determine how quickly a company can convert the assets and use […]
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