Liquidity Ratio
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Analysis and Interpretation of Financial Statements for Decision Making
MS: Nisbah Kecairan · EN: Liquidity Ratio · ZH: 流动性比率
Meaning
Liquidity ratios measure a business's ability to pay its current liabilities as they fall due. They use current assets and current liabilities, and include the current ratio and the acid test ratio. Good liquidity means the business can meet its short-term obligations.
Example
Harmoni Enterprise has current assets of RM60,000 and current liabilities of RM30,000. The business is considered to have sufficient liquidity because its assets can cover its short-term debts twice over.
Source: DSKP KSSM Prinsip Perakaunan Tingkatan 5