Difference between revisions of "Liquidity ratios"

Revision as of 10:55, 27 November 2023

Liquidity ratios are two ratios, current ratio and acid test ratio, which measure a company’s ability to pay off short-term debts.

Liquidity ratios. The two ratios -- current ratio and acid test ratio -— which measure a company’s ability to pay off short-term debts.

Liquidity ratios. Ratios that show the relationship of a firm's cash and other current assets to its current liabilities.

Liquidity ratios. The current ratio and quick ratio measure a firm's ability to meet short-term cash obligations.

Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.

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-[[Liquidity ratio]] is the two ratios—current ratio and acid test ratio—which measure a company’s ability to pay off short-term debts.
+[[Liquidity ratios]] are two ratios, [[current ratio]] and [[acid test ratio]], which measure a company’s ability to pay off short-term debts.
 ==Definitions==
 According to [[College Accounting: A Practical Approach by Slater (13th edition)‎]],
-:[[Liquidity ratios]]. The two ratios—current ratio and acid test ratio—which measure a company’s ability to pay off short-term debts.
+:[[Liquidity ratios]]. The two ratios -- [[current ratio]] and [[acid test ratio]] -— which measure a company’s ability to pay off short-term debts.
 According to [[Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition)]],
 :[[Liquidity ratio]]s. Ratios that show the relationship of a firm's cash and other current assets to its current liabilities.