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Financial ratios (The financial ratios of a business are used by theβ¦
Financial ratios
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The current ratio
Reflects the relationship between the value of the current assets and the current liabilities of a business.
Current ratio=(πΆπ’πππππ‘ ππ π ππ‘π )/(ππ’πππππ‘ ππππππππ‘πππ )
The acid βtest ratio
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Acid-test ratio=(ππ’πππππ‘ ππ π ππ‘π βπΌππ£πππ‘πππ¦)/(πΆπ’πππππ‘ ππππππππ‘πππ )
Liquidity ratios
provide an indication of the ability of the business to meet its short-term obligations as they become due without curtailing or ceasing its normal activities
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