0
Why is the quick ratio a more appropriate measure of liquidity than the current ratio for a large-airplane manufacturer?
The quick ratio is more appropriate than the current ratio because it only factors in the assets that a business, like a large airplane manufacturer, can easily turn into cash. The quick ratio does not include inventory or land assets so is typically lower than the current ratio.
What else can I help you with?
What are the ratios in liquidity?
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 a paying off its debts. hope this helps.
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 liquidity decision?
The decision made for the management of current asset that affects a firm's liquidity.
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 current Statutory Liquidity Ratio of India as on 1st feb 2011?
statutary liquidity ration currnetly is 25%
What is a liquidity order?
ORDER OF LIQUIDITY is when items on a balance sheet are listed in order of liquidity. After cash, the other current assets are listed in order of liquidity or nearness to cash (i.e. Accounts Receivable first, then Inventory).
The relationship between current assets and current liabilities is important in evaluating a company's?
Liquidity
Does a company whose current liabilities exceed its current assets have a liquidity problem?
Obviously yes
What is a measure of liquidity?
the two ratios that measure liquidity is acid test and current ratio. the acid test ratio is current assets- stock/ current liabilities the current ratio is current assets/ current liabilities
How does the current ratio relate to the other liquidity ratios?
The current ratio is a key liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets. It complements other liquidity ratios, such as the quick ratio and cash ratio, by providing a broader view of liquidity. While the current ratio includes all current assets, the quick ratio excludes inventory, and the cash ratio focuses solely on cash and cash equivalents. Together, these ratios offer a comprehensive assessment of a company's short-term financial health and liquidity position.
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.
