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
Internal Rate Of Return
The Internal Rate of Return (IRR) measures the compound annual return of a financial asset,...
Discount Brokers
Discount brokers are platforms that provide essential stock trading and investment services without offering the...
Gamma
Gamma (Γ) is a second-order derivative that measures the rate of change of an option's...
EBITDA
EBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a financial metric...
Bottom Line in Finance
In finance, the 'bottom line' refers to a company’s key metrics, such as earnings, profits,...
Bureau Of Indian Standards
The Bureau of Indian Standards (BIS) ensures the safety and reliability of goods and services...
