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 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),

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