Which of the following provides the best description of the liquidity ratios? The quick ratio does...
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Which of the following provides the best description of the liquidity ratios? The quick ratio does not count inventory as part of the current assets because it's less liquid than other types of current assets. Cash ratio between -0.2 and 0.2 is usually a safe range for a firm's liquidity. If Firm A has higher values of all liquidity ratios than Firm B, and both firms are in the similar industry, then Firm B is managing its liquidity better than Firm A. Current ratio is the strictest test for a firm's liquidity position. Which of the following provides the best description of the liquidity ratios? The quick ratio does not count inventory as part of the current assets because it's less liquid than other types of current assets. Cash ratio between -0.2 and 0.2 is usually a safe range for a firm's liquidity. If Firm A has higher values of all liquidity ratios than Firm B, and both firms are in the similar industry, then Firm B is managing its liquidity better than Firm A. Current ratio is the strictest test for a firm's liquidity position.
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Related Book For
Introduction to Operations and Supply Chain Management
ISBN: 978-0132747325
3rd edition
Authors: Cecil B. Bozarth, Robert B. Handfield
Posted Date:
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