Liquidity and efficiency -It help in maintaining and measuring the short-term...
Financial Analysis The techniques of financial analysis are important to two groups: internal management and external users, such as investors and banks.
Liquidity ratios are an important class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital.
Common liquidity ratios include the quick ratio, current ratio, and days sales outstanding.
Liquidity ratios determine a company's ability to cover short-term obligations and cash flows, while solvency ratios are concerned with a longer-term ability to pay ongoing debts.
