Sensational Financial Liquidity Ratios
A good liquidity ratio is anything greater than 1.
Financial liquidity ratios. The other terms used for liquid ratio are Quick ratio and Acid Test Ratio. Income Statement for Years Ending December 31 2013 and 2014 2014 2013 Revenue 14147479 13566901 Cost of goods sold -8447099 -8131642 Selling general and administrative. The higher ratio the higher is the safety margin that the business possesses to meet its current liabilities.
Liquidity ratios analyze the ability of a company to pay off both its current liabilities as they become due as well as their long-term liabilities as they become current. The financial statements for Tyler Toys Inc. The group of these ratios is the Current Ratio Quick Ratio Cash Ratio Working Capital Ratio and Time Interest-Earning Ratio.
Finance questions and answers. Financial Ratio profitability ratios company liquidity ratio key financial analysis statutory liquidity ratio on Moneycontrol. Specifically these numbers show how many times over short-term liabilities can be paid using the business cash and liquid assets.
Liquidity Ratios are the group of Financial Ratios that normally use for analyzing and measuring the liquidity position of the entity by concerning the relationship between current assets and current liabilities. Liquidity ratio for a business is its ability to pay off its debt obligations. A balance sheet is provided as an example for calculating a companys financial position by measuring its liquidity which is the ability to pay its current debt with its current assets.
It indicates that the company is in good financial health and is less likely to face financial hardships. It is concerned with the relationship between liquid assets and liquid or current liabilities. Are shown in the popup window.
This analysis is important for lenders and creditors who want to gain some idea of the financial situation of a borrower or customer before granting them credit. Liquidity ratios are metrics that speak of a companys capacity to cover its financial obligations as soon as they are due. In this article we will consider some commonly used liquidity ratios used in the financial analysis of a company.