Liquidity ratios
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),
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.
