Business, 10.10.2019 03:00 brianmondesir1owahud

Liquidity ratios are used to measure a firm's ability to meet its obligations as they come due. two of the most commonly used liquidity ratios are the: (1) current ratio and (2) quick, or acid test, ratio. the current ratio is the most commonly used measure of solvency. its equation is: if a firm is having financial difficulty, it typically begins to pay its accounts payable more slowly and to borrow from the bank—both of which will increase its current causing a decline in the current ratio. the quick ratio is a measure of a firm's ability to pay off obligations without relying on the sale of , which are typically the least liquid of a firm's current assets. its equation is:

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Liquidity ratios are used to measure a firm's ability to meet its obligations as they come due. two...

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