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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

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Related Questions

How does a business calculate the current ratio and why is it important for financial analysis?

A business calculates the current ratio by dividing its current assets by its current liabilities. This ratio helps assess a company's ability to cover its short-term debts with its current assets. It is important for financial analysis because it indicates the company's liquidity and financial health. A higher current ratio generally suggests a stronger financial position.


In examining the liquidity ratios, the primary emphasis is the firm's?

In examining liquidity ratios, the primary emphasis is the firm's ability to meet its short-term obligations. These ratios, such as the current ratio and quick ratio, assess the company's capacity to convert assets into cash quickly to cover liabilities. A strong liquidity position indicates financial health and stability, reducing the risk of insolvency. Ultimately, these metrics help stakeholders evaluate the firm's short-term financial resilience.


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.


What is the definition of a liquidity ratio?

Liquidity ratio are designed to test a company's ability to meet its short-term financial obligations. To find the ratio, you take Cash and Cash Equivalent + Marketable Securities + Accounts Receivable divided by Current Liabilities.


What is the slr ratio for bank?

SLR stands for Statutory Liquidity Ratio. Statutory Liquidity Ratio is the amount of liquid assets, such as cash, precious metals or other approved securities, that a financial institution must maintain as reserves other than the Cash with the Central Bank. The statutory liquidity ratio is a term most commonly used in India.


Which financial ratio is the most helpful when determining which company to invest money into is it liquidity profitability leverage or activity ratio.?

E/P i think,


What is a mathematical tool financial managers use to assess the financial strengths and weaknesses of their firm?

ratio analysis


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 is current assets- stock/current liabilities.) liquidity ratio's shows how good a business is...


What is the significance of SLR?

SLR stands for Statutory Liquidity Ratio. Statutory Liquidity Ratio is the amount of liquid assets, such as cash, precious metals or other approved securities, that a financial institution must maintain as reserves other than the Cash with the Central Bank. The statutory liquidity ratio is a term most commonly used in India.


What quick ratio indicates?

Quick ratio indicates company's liquidity and ability to meet its financial liabilities. Formula of quick ratio = (Current assets - Inventory)/Current Liabilities


What are liquidity risk indicators?

Some common liquidity risk indicators include the current ratio, quick ratio, and cash ratio. These ratios help assess a company's ability to meet short-term obligations with its current assets. Additionally, metrics like days sales outstanding (DSO) and days payable outstanding (DPO) can also provide insights into a company's liquidity risk.


What is the SLR rate by RBI?

SLR stands for Statutory Liquidity Ratio. Statutory Liquidity Ratio is the amount of liquid assets, such as cash, precious metals or other approved securities, that a financial institution must maintain as reserves other than the Cash with the Central Bank. The statutory liquidity ratio is a term most commonly used in India.