Answers>Accounting>A Level>Article

What is a liquidity ratio?

Liquidity ratios help the firm to gauge on its ability to pay off its short-term debts. Generally, the higher the ration, the better is the vompany's position to pay off its debt. The most common liquidity ratios are: Current ratio & Acid-Test ratio.

Answered by Fahmeed R. • Accounting tutor

4195 Views

See similar Accounting A Level tutors

What is a liquidity ratio?

Related Accounting A Level answers

What is ratio analysis and why is it being used?

What are 3 accounting concepts used when preparing a set of accounts?

What are the main differences between financial and management accounting?

What are the advantages of activity based costing?