February 2007
Intermediate to advanced
288 pages
6h 32m
English
As discussed in Chapter 6, liquid assets are those that can be converted into cash within one year, while current liabilities are those that are due within one year. Accordingly, liquidity ratios measure a firm’s short-term ability to meet its current obligations.
Common liquidity ratios include:
Current ratio
Quick (acid) test
Current cash debt coverage ratio
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