Difference between revisions of "Liquidity ratios"
| Line 6: | Line 6: | ||
:[[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)]], | 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. |
==Related concepts== | ==Related concepts== | ||
Revision as of 18:09, 1 November 2019
Liquidity ratio is the 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.
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Liquidity ratios. Ratios that show the relationship of a firm's cash and other current assets to its current liabilities.
Related concepts
- 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.
