Definition

Liquidity ratio

Liquidity ratio measure of a firm’s ability to pay its short-term debts as they come due. Two common liquidity ratios are the current ratio and the quick (acid-test) ratio.

Share it:  Cite

More from this Section

  • Promotion
    Promotion refers to the activities the firm takes to communicate the merits of its product ...
  • Prospectus
    Prospectus is a document that presents a company’s financial data for several consecutive ...
  • Market Analysis
    The market analysis is an analysis that breaks the industry into segments and zeroes in ...
  • Lifestyle Firms
    Lifestyle firms are those businesses which provide their owner or owners the opportunity ...
  • Entrepreneurship
    Entrepreneurship is the process of bringing together the creative and innovative ideas ...