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Q » Explain liquidity ratios.
06 Dec, 2025
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A » Liquidity ratios are financial metrics used to assess a company's ability to meet short-term obligations. Key ratios include the current ratio, which compares current assets to current liabilities, and the quick ratio, which excludes inventory from current assets. A higher ratio indicates better liquidity, reflecting a firm’s capability to pay debts without needing asset liquidation. These ratios are crucial for stakeholders evaluating financial health and operational efficiency.
06 Dec, 2025
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