Learn various types of solvency ratios used as part of financial ratio analysis. Browse through the below resources.
What is Cash ratio? The cash ratio or cash coverage ratio is an important liquidity ratio which is closely related to Quick Ratio and Current Ratio. Analyzing cash ratio helps in identifying the liquidity position of the company purely in terms of cash and cash equivalents. Cash ratio Meaning Cash Ratio tries to build a …
What is Quick ratio? As part of liquidity ratios, apart from the Current Ratio, another important ratio is the Quick ratio or Acid test ratio. Similar to the current ratio, even the Quick ratio is very easy to calculate and interpret. Since it highlights the liquidity position of any company clearly, it is one of …
What is Cash conversion cycle? The cash conversion cycle is one of the most widely followed liquidity ratio. As part of Liquidity ratio analysis, similar to the Current ratio and Quick ratio, this financial metric helps in assessing the health of a company. This learning is going to be a long one since it requires …
What is Current ratio? Understanding the current ratio formula is an important element of liquidity ratio analysis. Liquidity ratios help us in understanding if the companies are in a better position to meet their short-term obligations. One of the most widely used and important liquidity ratio is the Current Ratio. Not only the ratio is …
What is the Defensive Interval Ratio? As part of financial analysis, it is important to look at the liquidity position of any company. This helps in understanding if the company is ready to meet any sudden short term obligations. Defensive Interval Ratio or DIR, in short, is one of the most used liquidity ratio. It …