USING CURRENT AND QUICK RATIOS TO HELP DETERMINE A COMPANY’S LIQUIDITY
| Liquidity is a measure of the quality and adequacy of current assets to meet current obligations as they come due. (*) Lenders look at various ratios calculated from a company’s financial statements to help them assess the ability of a potential (or even existing) customer to repay borrowed monies, plus interest. Two important ratios in this regard come from the balance sheet: 1. Current Ratio; and, 2. Quick RatioUSING CURRENT AND QUICK RATIOS TO HELP DETERMINE A COMPANY’S LIQUIDITY |