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Question
Why do we calculate the liquidity ratio?
Why do we calculate the liquidity ratio?
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Solution
A liquidity ratio is a kind of monetary proportion used to decide an organization’s capacity to pay its short-term obligation or commitments. The measurement decides whether an organization can utilize its current, or fluid, resources to cover its present liabilities.
A liquidity ratio is a kind of monetary proportion used to decide an organization’s capacity to pay its short-term obligation or commitments. The measurement decides whether an organization can utilize its current, or fluid, resources to cover its present liabilities.
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