What is liquidity ratios, Managerial Accounting

Assignment Help:

Liquidity ratios

Liquidity refers to the ability of concern to meet its current obligations as and when these become due. The short term obligations are met by realizing amounts from current floating or circulating assets. The current assets should either be liquid or near liquidity. These should be convertible into cash for paying obligations of short term nature.

The sufficiency or insufficiency of current assets should be assessed by comparing term with short term (current) liabilities. If current assets can pay off current liabilities then liquidity position will be satisfactory. On the other hand if current liabilities may not be easily met out of current assets then liquidity position will be bad.

 


Related Discussions:- What is liquidity ratios

Explain the terms - maintenance and improvement, Explain the terms - mainte...

Explain the terms - maintenance and improvement Maintenance ; under the maintenance function, the management must first establish policies rules directives and standard operat

Collection effort, The collection policy of a firm is intend at timely coll...

The collection policy of a firm is intend at timely collection of overdue amount and comprises of the subsequent. a.      Monitoring the state of debtors (account receivable)

Standard costing and budgetary control , STANDARD COSTING AND BUDGETARY CON...

STANDARD COSTING AND BUDGETARY CONTROL In practice, the terms standard cost and budgeted cost might be used interchangeably. Whereas it is possible to have budgeting without s

Use of budgetary controls, Use of Budgetary controls Budgetary controls...

Use of Budgetary controls Budgetary controls are used for the following reasons: 1) To state the objectives of the organization as a whole. 2) To reveal the extent by whi

Strategic positioning, Strategic Positioning The company must identify ...

Strategic Positioning The company must identify its strategic choices. This can be done from the firm’s objectives, which emanates from the firms mission. Strategies have to be

Production during the period, Coolidge Company estimates that its productio...

Coolidge Company estimates that its production workers will work 125,000 direct labor hours during the upcoming period and that overhead costs will amount to $500,000. What predete

Distinguish between advertising and public relation, Question 1: a. Dis...

Question 1: a. Distinguish between Advertising and Public Relation? b. Discuss the methods adopted by a Public Relation company in promoting the image of a destination in th

Prepare two tables showing net profit, Prepare two tables showing net profi...

Prepare two tables showing net profit, residual income and return on investment for each year of the project and also net present value (NPV) for: (i) The BEST OUTCOME; (ii) The

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd