Friday, February 23rd 2018


How to measure liquidity?

Interesting Question?   (5)   (5)

Answers (1)

25th Nov 2009 by Amelia Timbers

The best way to measure liquidity is the "quick ratio", also known as "acid test". All this formula is are total assets over total liabilities. The idea behind it is to measure how quickly a debtor could pay off their debts if they need to. The current ratio is the same thing, but with current assets over current liabilities. This addresses a debtor's ability to pay off short term debts with current assets, and measures near term liquidity. Liquidity is an important indicator of financial health; significant debt, long or short term, is challenging to overcome without the assets to pay them.

Like This Answer?   (0)   (0)
This answer is the subjective opinion of the writer and not of

24th Nov 2009 In Business 1 Answers | 669 Views
Subjects: liquidity,

Answer This Question / Give Your Opinion
How to measure liquidity?

Answer: *

What country is this answer relevent to? *
Your Name: *

Enter Verification Number: *

Give Your Opinion
Which bank has the best credit card rewards program in Australia?
Share a simple answer to help inform others:
Specific to any country?
First name / Alias

• Your answer will be posted here:
Which bank has the best credit card rewards program in Australia?
Unanswered Questions in Business
What is business consulting?
Where can i get finance to purchase business premises?
Can i get a grant to start a business?
Can i run a business out of my home?
What are the different types of business bank accounts available?

Answered Questions in Business
How can i get a grant to start a business?
Where to locate a business?
How to refinance a business?
How to open a corporate bank account?
Where can i find suppliers?
Ask A Question
Get opinions on what you want to know:
Specific to any country?