Businesses may experience fluctuations in their current ratio as a result of seasonal changes. For example, a retail business may have a higher level of inventory during the holiday season ...

the ratio measures whether a business can meet its short-term obligations using only its most liquid assets. This makes it a more stringent indicator than the current ratio, ensuring that ...

It’s also known as the working capital ratio. Current assets are assets that a company can easily turn into cash within one year or one business cycle, whichever is less. They don’t include ...

Reviewed by Charlene Rhinehart Fact checked by Suzanne Kvilhaug What Is a Liquidity Ratio? A liquidity ratio is a measurement ...