what is liquidity ratio?
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The ratio between the liquid assets and the liabilities of a bank or other institution is known as "Liquidity ratio".
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Answer:
The basic formula to calculate liquidity can be given as follows:
Liquidity = Assets / Liabilities
Liquidity ratio:
It is the type of ratio revealing one's ability to pay its debt before the due date. So, this ratio educates us on the rate of a company to convert its assets into cash to pay off its liabilities. Liquidity ratio is a short-term solvency method used to pay off the debts on a timely basis.
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There are majorly 3 kinds of Liquidity Ration
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