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.

FR
Answered by Fahmeed R. Accounting tutor

3776 Views

See similar Accounting A Level tutors

Related Accounting A Level answers

All answers ▸

how is the income statement (I/S) related to the balance sheet (B/S)


What is Accounting Based on?


What is depreciation and what are the 2 methods of depreciating non-current assets?


What are the main differences between financial and management accounting?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences