What's it: The liquidity ratio is a financial ratio to measure a company's ability to meet its short-term obligations. Commonly used ratios are

# Liquidity Ratio

## Current Ratio: How to Calculate and Interpret

What's it: The current ratio is a financial ratio to measure liquidity by considering all short-term assets and liabilities. It is the

## Quick Ratio: Formula, Calculation, Interpretation

What's it: The quick ratio is a financial ratio to measure liquidity by excluding some less liquid accounts such as inventory. It tells

## Acid Test Ratio: Meaning, Formula, Calculation

What's it: The acid test ratio is a liquidity ratio to measure whether a company has sufficient cash to cover current liabilities using its

## Defensive Interval Ratio: Importance, Calculation, and Interpretation

What's it: The defensive interval ratio is a financial ratio to measure how long a company can continue to meet daily expenses using

## Cash Ratio: Formula, Calculation, and Interpretation

What's it: The cash ratio is a financial ratio to measure a company's ability to meet its short-term liabilities. It is the most

## Cash Conversion Cycle: How it Works, Calculation and Interpretation

What's it: The cash conversion cycle measures how long, in days, it took a company to collect cash since the money was spent on buying raw