# What are some types of liquidity ratios?

current and quick ratios. The quick (acid test) ratio is a more accurate measure of liquidity because it excludes inventories.

### 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

### What are liquidity ratios?

Liquidity refers to the ability of a borrower to pay his debts as and when they fall due. Good liquidity is a requirement of all companies especially banks and other financial institutions. Imagine going to your bank to withdraw cash and the cashier at the counter says, I don't have enough money in the branch come back later. It would be frustrating wouldn't it be? This would not happen if the bank had enough liquidity…

### What is Liquidity ratio analysis?

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…

### Dividing users of ratios into short term lenders long term lenders and stockholders which ratios would each group be most interest in and for what reasons?

1 because short-term lenders liquidity concern is with the firm's ability to pay short-term obligations as they come due. 2 because Long-term lenders--leverage ratios are concerned with the relationship of debt to total assets.Long-term lenders--leverage ratios will examine profitability to insure that interest payments can be made. 3. because Stockholders--profitability ratios, with secondary consideration given to debt utilization, liquidity, and other ratios. Since stockholders are the ultimate owners of the firm, they are primarily concerned…

### Which financial ratios are used by banks?

1. Liquidity Ratios - Ability of the company to pay off debt 2. Activity Ratios - How quickly a firm can convert its non-cash assets to cash assets 3. Debt Ratios - Ability of the firm to repay long-term debt 4. Profitability Ratios - To Measure the firms use of its assets and control of its expenses to generate an acceptable rate of return 5. Market Ratios - To Measure the investor response to owning…