Liquidity Ratio:
It is also called as short-term ratio. This ratio helps to understand the liquidity in a business
which is the potential ability to meet current obligations. This ratio expresses the relationship
between current assets and current assets of the business concern during a particular
period. The following are the major liquidity ratio:
Current Ratio = Current Assets / Current Liability
Quick Ratio = Quick Assets / Quick or Current Liability
It is also called as short-term ratio. This ratio helps to understand the liquidity in a business
which is the potential ability to meet current obligations. This ratio expresses the relationship
between current assets and current assets of the business concern during a particular
period. The following are the major liquidity ratio:
[Post Image Courtesy of DigitalArt at FreeDigitalPhotos.net]
Current Ratio = Current Assets / Current Liability
Quick Ratio = Quick Assets / Quick or Current Liability
Liquidity Ratio
![Liquidity Ratio]()
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