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what is liquidity ratio analysis?

faizak292 ∙

Lvl 3

∙ 1y ago

Updated: 6/28/2023

RATIO ANALYSIS Meaning and definition of ratio analysis: Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to interpret the financial statements...
measure of a firms ability to meet short term cash payments. bassically liquidity ratios show how good a business is at paying off its debts. hope this helps :)
liquidity ratios include current ratio (which is current assets/current liabilities) and acid test (which is current assets- stock/current liabilities.) liquidity ratio's shows how good a business is...

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More answers

it is an analysis of liquidity of a company. a company that is liquid has surplus cash remaining even after it has fulfilled its obligations. in simple terms, a company which has cash after paying off liabilities is said to have good liquidity.

faizak292 ∙

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∙ 1y ago

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Related Questions

What ratio or other financial statement analysis technique will you adopt for analysis of liquidity of a firm?

What ratio or other financial statement analysis technique will you adopt for this.

Which one of the following is not a characteristic generally evaluated in ratio analysis profitablility marketability liquidity or sovency?

Marketability is a characteristic that is not generally evaluated in ratio analysis.

Liquidity and yield analysis?

what is the comparison between liquidity & yield analysis ??????

types of ratio analysis?

generally, there are five types of ratio analysis which are done by companies. they are:a) Profitability analysisb) Liquidity analysisc) Solvency analysisd) Asset efficiency analysise) Market value analysis

Current ratio and liquidity ratio are same?

no they are not the same. the current ratio is current assets/current liabilities. but liquidity ratio or acid test ratio is current assets - stock/current liabilities. liquidity ratio shows you how able a business is to pay off its debt when stock is taken out of the equation.

What is the purpose of the liquidity ratio?

Liquidity ratios measure the availability of cash to pay debt

An example of liquidity ratio is the?

current ratio and acid test ratio are examples of liquidity ratios'. current ratio is current asset's/ current liabilities. acid test ratio is current assets- stock / current liabilities.

What is current Statutory Liquidity Ratio?

25%

What is the financial ratio used to assess a company's liquidity?

The quick ratio which equals total assets/total liabilities Answer: Liquidity Ratios are the ratios that can be used to measure the liquidity of a company. As a rule of the thumb, all companies must have good liquidity ratios. The four main ratios that fall under this category are: 1. Current Ratio or Working Capital Ratio 2. Acid-test Ratio or Quick Ratio 3. Cash Ratio 4. Operation Cash-flow ratio

How to interpret balance-sheet?

Using Ratio analysis. There are 4 components of Ratio Analysis, namely Profitability, Liquidity, Gearing and Investment. Each categories has it own ratios that measures different aspect of the business. By interpreting the B.S just by it's figures alone is not helpful and biased.

What is ratio analysis and importance of ratio analysis in financial management?

what is ratio analysis

What is some information about ratio analysis?

Ratio analysis is a quantitative procedure of obtaining a look into a firm’s functional efficiency, liquidity, revenues, and profitability by analysing its financial records and statements. Ratio analysis is a very important factor that will help in doing an analysis of the fundamentals of equity. Analysts and investors make use of the methods for ratio analysis to study and evaluate the fiscal wellbeing of businesses by closely examining the historical performance and monetary statements.

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