What is a liquidity ratio?
A liquidity ratio is an indicator of whether a company’s current assets will be sufficient to meet the company’s obligations when they become due.
The liquidity ratios include the current ratio and the acid test or quick ratio. The current ratio and quick ratio are also referred to as solvency ratios. Working capital is an important indicator of liquidity or solvency, even though it is not technically a ratio.
Liquidity ratios sometimes include the accounts receivable turnover ratio and the inventory turnover ratio. These two ratios are also classified as activity ratios.
Learn more about Financial Ratios including the liquidity ratios.
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liquidity ratio= current assets/current liabilities
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kindly give me the detail about deffered gross profit regarding Installment Sales.
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what is the main objective of using quick ratio, is it applicable to all businesses
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plz tell me Is solvency ratio n liqidify ratio is same or not?if not then tell me the differences
simple to understand useful
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