CHAPTER 18 – Understanding Financial Information and ...

36. Liquidity ratios measure the company’s ability to pay its short-term debts. Short-term debts are expected to be repaid within one year and are of importance to the firm’s creditors who expect to be paid on time. 37. Two key liquidity ratios are: a. current ratio. b. quick ratio. 38. Current ratio = Current assets. Current liabilities . 39. ................
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