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Liquidity Measurement Ratios: Introduction


If it is decided to study the liquidity position of the concern, then liquidity ratios are calculated. These ratios are used to measure the firm’s ability to meet short term obligations.


From these ratios, much insight can be obtained into the present cash solvency of the firm and the firm’s ability to remain solvent in the event of adversity.

NEXT – Liquidity Measurement Ratios: Current Ratio
Table of Contents
1) Liquidity Measurement Ratios: Introduction
2) Liquidity Measurement Ratios: Current Ratio
3) Liquidity Measurement Ratios: Quick Ratio
4) Liquidity Measurement Ratios: Cash Ratio

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