4 min Read Dec 1, 2022
A Liquidity Ratio measures a company's ability to meet its short-term debt obligations using its most liquid assets. The two most common types are the Current Ratio (Current Assets ÷ Current Liabilities) and the Quick Ratio (also called the Acid Test Ratio). Investors use liquidity ratios to assess financial stability—a ratio above 1 generally indicates that a company can cover its short-term liabilities, while a ratio below 1 may signal potential cash flow stress.
For android only
