Liquidity Ratio Calculator
Liquidity Ratio Calculator
Component | Description |
---|---|
Current Assets | The total assets that can be converted into cash within one year. |
Current Liabilities | The total liabilities that must be paid within one year. |
Liquidity Ratio | The ratio of current assets to current liabilities, measuring a company’s ability to pay off its short-term obligations. |
Formula | Liquidity Ratio = Current Assets / Current Liabilities |
Purpose | Used to assess a company’s short-term financial health and its ability to meet short-term obligations. |