Excel: Liquidity Ratios - Current Ratio, Quick Ratio, & Cash Ratio

A liquidity ratio is a type of Financial Ratio that determines if a company can pay its short-term debt and obligations with its current assets. The higher the liquidity ratio, the better. We will look at three liquidity ratios - current ratio, quick ratio, and cash ratio. All three ratios use the balance sheet.

Chapters:
0:00 Intro
0:25 What are liquidity ratios?
1:03 Microsoft Balance Sheet
1:40 Current Ratio
2:17 Name Range
3:20 Quick Ratio
4:15 Cash Ratio

What are Current Assets?
A liquidity ratio is used to determine if a company can pay its short-term financial obligations with its current assets. Current Assets consist of cash and other assets expected to be converted to cash within a year.

Examples of Current Assets:
Cash
Cash Equivalents
Accounts Receivable
Inventory
Prepaid Expenses
Other Liquid Assets

Liquidity Ratios
1) Current Ratio
2) Quick Ratio
3) Cash Ratio

Chris Menard will speak at The Southeastern Accounting Show (SEAS). This is GSCPA’s premier event, providing you with a high-quality education in multiple interest areas.
https://chrismenardtraining.com/post/...

Blog post on Liquidity Ratios
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