Question

explain liquidity ratio in short​

Answer 1

Answer:

ᴛʜᴇʏ sʜᴏᴡ ᴛʜᴇ ɴᴜᴍʙᴇʀ ᴏғ ᴛɪᴍᴇs ᴛʜᴇ sʜᴏʀᴛ ᴛᴇʀᴍ ᴅᴇʙᴛ ᴏʙʟɪɢᴀᴛɪᴏɴs ᴀʀᴇ ᴄᴏᴠᴇʀᴇᴅ ʙʏ ᴛʜᴇ ᴄᴀsʜ ᴀɴᴅ ʟɪϙᴜɪᴅ ᴀssᴇᴛs. ɪғ ᴛʜᴇ ᴠᴀʟᴜᴇ ɪs ɢʀᴇᴀᴛᴇʀ ᴛʜᴀɴ 1, ɪᴛ ᴍᴇᴀɴs ᴛʜᴇ sʜᴏʀᴛ ᴛᴇʀᴍ ᴏʙʟɪɢᴀᴛɪᴏɴs ᴀʀᴇ ғᴜʟʟʏ ᴄᴏᴠᴇʀᴇᴅ.

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Answer 2

Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt obligations. ... They show the number of times the short term debt obligations are covered by the cash and liquid assets. If the value is greater than 1, it means the short term obligations are fully covered.