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LIQUIDITY RATIO ANALYSIS The liquidity ratio analysis is used to assess the short term financial position of the firm. Liquidity refers to the ability of the firm to meet its current liabilities. That is why these ratios are also known as ‘short-term solvency ratios’. These ratios indicate the firm’s ability to meet its current obligations…
CASH RATIO Cash Ratio is a type of liquidity ratio that is calculated to analyze the short term solvency or financial position of the firm. It is calculated to exclude the receivables from the current and liquid assets and to know about the Cash assets. Although receivables, debtors and bills receivables are generally more liquid…
ACID TEST RATIO FORMULA Acid Test Ratio, a type of liquidity ratio, may be defined as the relationship between Acid Test or Acid Test assets and current liabilities. An asset is said to be Acid Test if can be converted into cash within a short period without loss of value. The Acid Test ratio is…
QUICK RATIO AND CURRENT RATIO The difference between Quick Ratio and Current Ratio is as follows: BASIS OF DIFFERENCE QUICK RATIO CURRENT RATIO RELATIONSHIP It establishes the relationship between Liquid assets and current liabilities. It establishes the relationship between current assets and current liabilities. ASSESSMENT It assesses the ability to meet current liabilities immediately. It…
QUICK RATIO FORMULA Quick Ratio, a type of liquidity ratio, may be defined as the relationship between quick or quick assets and current liabilities. An asset is said to be quick if can be converted into cash within a short period without loss of value. The quick ratio is also known as liquid ratio or…
QUICK RATIO Quick Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. The quick ratio is also known as Liquid ratio or acid…
ABSOLUTE LIQUID RATIO FORMULA Absolute Liquid Ratio is a type of liquidity ratio that is calculated to analyze the short term solvency or financial position of the firm. It is calculated to exclude the receivables from the current and liquid assets and to know about the absolute liquid assets. Although receivables, debtors and bills receivables…
ABSOLUTE LIQUID RATIO Absolute Liquid Ratio is a type of liquidity ratio that is calculated to analyze the short term solvency or financial position of the firm. It is calculated to exclude the receivables from the current and liquid assets and to know about the absolute liquid assets. Although receivables, debtors and bills receivables are…
LIQUID RATIO FORMULA Liquid Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. The liquid ratio is also known as Quick ratio or…
MEANING Liquid Ratio, a type of liquidity ratio, may be defined as the relationship between quick or liquid assets and current liabilities. An asset is said to be liquid if can be converted into cash within a short period without loss of value. This ratio is also known as Quick ratio or Acid test ratio….
