How well can current assets cover current liabilities? Reviewed by Amy Drury The acid-test ratio (ATR), also commonly known as the quick ratio, measures the liquidity of a company by calculating how ...

Liquidity ratios are a class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital.

The quick ratio, often referred to as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. It's calculated as (cash + ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Calculating financial ratios is an important component of analyzing a business that can be extremely helpful to business owners. By using the information from your business' financial statements, you ...

Financial ratios allow you to break down your company's financial statements and see how it is performing from different angles. Whether you are creating a proposal for new investors, seeking bank ...

Liquidity ratios are key financial ratios used by internal and external analysts to gauge a company's liquidity, which represents its capacity to pay its existing short-term liabilities if it needs to ...

A quick ratio is a metric used to calculate a company's liquidity and how easily it could pay off its debts. A quick ratio works by providing a relatively fast assessment of a company's financial ...