Liquidity Liquidity explains the extent of cash’s nearness to assets and liabilities. It explains how easily assets can be converted into cash. Following are the types of ratios that help to find liquidity position of a company. To Differentiate: between working capital , current ratio and acid test ratio.

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Chapter 8, Problem 22RQ

To determine

Liquidity

Liquidity explains the extent of cash’s nearness to assets and liabilities. It explains how easily assets can be converted into cash. Following are the types of ratios that help to find liquidity position of a company.

To Differentiate: between working capital, current ratio and acid test ratio.

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