Liquidity ratios

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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.

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.

According to the Strategic Management by David and David (15th edition),

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


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