what do you mean by liquidity ratio?
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Liquidity ratios are measurements used to examine the ability of an organization to pay off its short-term obligations.
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Liquidity Ratio Defined
In accounting, the term liquidity is defined as the ability of a company to meet its financial obligations as they come due. The liquidity ratio, then, is a computation that is used to measure a company's ability to pay its short-term debts. ... It is followed by the acid ratio, and the cash ratio.
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