What is liquidity ratios, Managerial Accounting

Assignment Help:

Liquidity ratios

Liquidity refers to the ability of concern to meet its current obligations as and when these become due. The short term obligations are met by realizing amounts from current floating or circulating assets. The current assets should either be liquid or near liquidity. These should be convertible into cash for paying obligations of short term nature.

The sufficiency or insufficiency of current assets should be assessed by comparing term with short term (current) liabilities. If current assets can pay off current liabilities then liquidity position will be satisfactory. On the other hand if current liabilities may not be easily met out of current assets then liquidity position will be bad.

 


Related Discussions:- What is liquidity ratios

Planning-role of management accountant , Planning Planning is the funda...

Planning Planning is the fundamental function of the management by means of which the managers decide: What goals are to be accomplished How they will be accomplished.

Describe the selling costs and development costs, Describe the Selling cost...

Describe the Selling costs and Development costs Selling costs: These are costs of seeking to create and stimulate demand (sometimes termed as marketing) and securing orde

Cost concepts and estimations, in the past,the company had difficulties sep...

in the past,the company had difficulties separating semi-variable costs between varible and fixed costs.the company''s varible cost per unit consists of the cost of patrol,maintena

Research, Activity Based costing and Functional Based Costing compare them ...

Activity Based costing and Functional Based Costing compare them together in terms of efficiency, advantages, disadvantages and accuracy.

Explain the modern control methods, 1. Explain the modern control methods w...

1. Explain the modern control methods with examples. 2. What are the reports produced for performance measurement? Demonstrate.

State the steps for standard costing system, State the steps for Standard c...

State the steps for Standard costing system standard costing system involves the following steps 1) Setting-up of standards for each element of cost: standards should be s

Chapter 3, Cretin Enterprises uses a predetermined overhead rate of $21.40 ...

Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufact

Operating leverage, How do you compare two companies operating leverage? Mu...

How do you compare two companies operating leverage? Must the sales volume be set the same or the net operating income?

Ira, Your financial advisor has recommended that you invest into your Roth ...

Your financial advisor has recommended that you invest into your Roth Individual Retirement Account (Roth IRA) the sum of $5,000. If you put in $5,000 today, what will this investm

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd