What is the formula for the liquid ratio?
submitted by Meme

belikewater

The liquid ratio is: Liquid Assets / Current Liabilities

It measures a company's ability to meet its short-term obligations with liquid assets. This is different from the Current Ratio. The current ratio measures how well a company can pay its liabilities with other assets. In other words, it's Current Assets / Current Liabilities.. Liquid Ratio is (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities.

julius

The liquid ratio shows how easily a company can pay off its short-term debts using assets that can be quickly turned into cash. Those are your liquid assets.

The formula for the liquid ratio is:
Liquid Ratio = Liquid Assets / Current Liabilities

Joel Flescher

Liquid Ratio is (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities