Liquidity ratios
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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.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Liquidity ratio. The two ratios—current ratio and acid test ratio—which measure a company’s ability to pay off short-term debts.
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.
