Section 5
Liquidity Ratios
Book
Version 3
By Boundless
By Boundless
Boundless Accounting
Accounting
by Boundless
2 concepts
Current Ratio
Current ratio is a financial ratio that measures whether or not a firm has enough resources to pay its debts over the next 12 months.
Quick Ratio (Acid-Test Ratio)
The Acid Test or Quick Ratio measures the ability of a company to use its assets to retire its current liabilities immediately.