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

What value can management derive from a balance scorecard, What value can m...

What value can management derive from a Balance Scorecard? How does the management accountant contribute?

Simple queues, Simple Queues A simple queue has the following character...

Simple Queues A simple queue has the following characteristics; 1) There is a simple service channel 2) There are ‘discrete’ customers e.g. customers in a bank, or aircra

Inventory control, INVENTORY CONTROL The activities of a business durin...

INVENTORY CONTROL The activities of a business during a financial year combine investment projects in progress with new projects commencing and others terminate within the year

Incremental budgeting, the suitability of incremental budgeting to a stable...

the suitability of incremental budgeting to a stable and static environment

Study guide , The following information pertains to Fairways Driving Range,...

The following information pertains to Fairways Driving Range, Inc.: The company is considering operating a new driving range facility in Sanford, FL. In order to do so, they will

Model construction, Model Construction The success of a simulation exer...

Model Construction The success of a simulation exercise is related to the predictive quality of the underlying model, so that considerable care should be taken with model const

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

Special orders, Issa Company manufactures a personal computer designed for ...

Issa Company manufactures a personal computer designed for use in schools and markets it under its own label. Issa has the capacity to produce 25000 units a year but is currently p

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