Liquid Ratio is equal to liquid assets divided by ___________.
مائع کا تناسب مائع اثاثوں کے برابر ہے جس کو ___________ سے تقسیم کیا گیا ہے۔
- current liabilities
- total liabilities
- contingent liabilities
- none
Explanation
All liquidity ratios measure a firm's ability to cover short-term obligations by dividing current assets by current liabilities (CL).
Types of liquidity ratios
Current Ratio = Current Assets / Current Liabilities.
Quick Ratio = (Cash + Accounts Receivable) / Current Liabilities.
Cash Ratio = (Cash + Marketable Securities) / Current Liabilities.
Net Working Capital = Current Assets – Current Liabilities.
ND5-09-2023
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