Liquidity Assessment

Assessing Liquidity and Solvency

Liquidity Assessment

Liquidity ratios measure a company’s ability to pay debt obligations and its margin of safety through the calculation of metrics including the current ratio, quick ratio, and operating cash flow ratio.

Key Ratios

  • Current Ratio
  • Acid Test (Quick Ratio)

Current Ratio vs Quick Ratio: Key Differences & Formulas Explained

Compare current ratio and quick ratio with clear formulas. Learn when to use each liquidity metric and what the numbers mean for financial analysis.

4 min read
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