SHORT-TERM SOLVENCY RATIOS - Accounts and Finance for Managers

Short term Solvency Ratios

To study the short term solvency or liquidity of the firm, the following are various ratios

  • Current Assets Ratio
  • Acid Test Ratio or Quick Assets Ratio
  • Super Quick Assets Ratio
  • Defensive Interval Ratio

Current Assets Ratio

It is one of the important accounting ratios to find out the ability of the business fleeces to meet out the short financial commitment This is the ratio establishes the relationship in between the current assets and current liabilities.

What is meant by current assets /Current assets are nothing but available in the form of cash, equivalent to cash or easily convertible in to cash.

What is meant by the current liabilities?

Current liabilities are nothing but short term financial resources or payable in short span cof time within a year.

current assets
current Liabilities

Current Assets Ratio

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