Cryptocurrency Q&A
How do you solve for liquidity?
How do you solve for liquidity?
HanRiverVision
Thu Nov 28 2024
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5 answers
1209
I'm trying to figure out how to address a liquidity issue. I need to understand the steps or strategies that can be employed to effectively solve for liquidity in a financial context.
5 answers
EnchantedMoon
Fri Nov 29 2024
The acid test ratio provides a stringent measure of your business's liquidity. It indicates how well your company can pay off its short-term obligations using its current assets.
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Dario
Fri Nov 29 2024
To assess your company's liquidity, you need to locate specific line items on the balance sheet.
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DaeguDivaDance
Fri Nov 29 2024
The first item to find is Current Assets. This includes cash, accounts receivable, inventory, and any other assets that can be converted into cash within one year.
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isabella_taylor_activist
Fri Nov 29 2024
The second item is Current Liabilities. This includes short-term debts, such as payables, taxes, and the current portion of long-term debt.
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GyeongjuGlory
Fri Nov 29 2024
Once you have both of these figures, you divide Current Assets by Current Liabilities. This ratio is known as the acid test ratio.
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