Advertisements
Advertisements
Question
What are liquidity ratios?
Short Answer
Advertisements
Solution
Liquidity ratios are calculated to determine the short-term solvency of a business, i.e. the ability of the business to pay back its current dues. Liquidity means easy conversion of assets into cash without any significant loss and delay.
Short-term creditors are interested in ascertaining liquidity ratios for timely payment of their debts.
Liquidity ratio includes
- Current Ratio
- Liquid Ratio or Quick Ratio
shaalaa.com
Is there an error in this question or solution?
