Liquidity Ratio
The Liquidity Ratio is a financial metric used to assess a company’s ability to meet its short-term debt obligations without relying on external financing. It measures the company’s liquidity, or its capacity to convert assets into cash quickly to cover liabilities. A higher liquidity ratio indicates a stronger ability to pay off short-term debts, ensuring the company can operate smoothly without facing liquidity issues. Common liquidity ratios include the current ratio and quick ratio, which help investors and analysts evaluate the company’s financial health and risk.
Related Terms
Common Stocks
Common stock is a type of share that grants the holder the right to a...
Commodity Futures
A commodity futures contract is an agreement between two parties to buy or sell a...
Delivery Trading
Delivery trading involves buying/selling a security and settling it by taking/giving delivery. Unlike intraday trading,...
Filing
Filing refers to submitting essential documents to SEBI before an Initial Public Offer (IPO). This...
Capital Expenditure
Capital expenditure (CapEx) is the funds a company allocates to acquire, maintain, or upgrade long-term...
All Or None Order
An all-or-none (AON) order is an instruction to execute a trade only if the full...
