Liquidity

Learn what liquidity is, when a liquidity test is required, and how to determine Current Ratio, Acid Ratio or Cash Ratio.

Liquidity: Introduction

Module 1 of 5

Get an overview of the three types of liquidity tests: the Current Ratio, Acid Ratio and Cash Ratio.

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Liquidity: Current Ratio

 Module 2 of 5

The Current Ratio indicates a company’s ability to pay its current liabilities from its current assets. Learn the formula for calculating the Current Ratio and when it is required to process loan files.

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Liquidity: Acid Ratio

Module 3 of 5

Learn how the Acid Ratio is used to measure how well a company can meet its short-term obligations with its most liquid assets.

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Liquidity: Cash Ratio

Module 4 of 5

Learn the formula for calculating the Cash Ratio—the most stringent measurement of a company’s liquidity.

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Liquidity: Check Your Understanding

Module 5 of 5

Now that you’ve completed this course, test your knowledge.

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