3 Liquidity Ratios You Should Know

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Liquidity Ratios help you assess if a business can meet its short-term obligations. In this video, I'll introduce you to three well-known Liquidity Ratios:

▪ Current Ratio: Also known as the Working Capital Ratio. This is the least conservative Liquidity Ratio. It's calculated by dividing Current Assets by Current Liabilities.
▪ Quick Ratio: Also known as the Acid-Test Ratio, it only considers Liquid Assets.
▪ Cash Ratio: This is the most conservative Liquidity Ratio. We can calculate the Cash Ratio by dividing Cash and Cash Equivalents by Current Liabilities.

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⏱️TIMESTAMPS
00:00 - Intro
00:34 - 1. Current Ratio
03:05 - 2. Quick Ratio
04:18 - 3. Cash Ratio

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