SELECT * FROM question_mgmt as q WHERE id=10412 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=51 AND chapterId=361 and ex_no='2' AND status=1 ORDER BY CAST(question_no AS UNSIGNED) CBSE Free NCERT Solution of 12th accountancy-company-accounts-and-analysis-of-financial-statements Accounting Ratios what are liquidity ratios discuss the importance

Question:

What are liquidity ratios? Discuss the importance of current and liquid ratio.

Answer:

Liquidity ratios are calculated to determine the short-term solvency of a business, i.e. the ability of the business to pay back its current dues. Liquidity means easy conversion of assets into cash without any significant loss and delay. Short-term creditors are interested in ascertaining liquidity ratios for timely payment of their debts.

Liquidity ratio includes:

Current Ratio: It explains the relationship between current assets and current
liabilities. It is calculated as:

Current Ratio = Current Assets/Current Liabilities

Liquid Ratio or Quick Ratio: It explains the relationship between liquid assets and current liabilities. It indicates whether a firm has sufficient funds to pay its current liabilities immediately. It is calculated as:

Liquid Ratio = Liquid Asset/Current LiabilitiesLiquid

Liquids Assets = Current Assets – Stock – Prepaid Expenses.


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='51' AND ex_no!=0 AND status=1 and id!=10412 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Accountancy - Company Accounts and Analysis of Financial Statements

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='51' AND ex_no!=0 AND status=1 and id!=10412 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


NCERT Solutions

Quick Links

Resources

Support