Liquid or Liquidity Ratio / Acid Test or Quick Ratio: Definition: Liquid ratio is also termed as “Liquidity Ratio“, “Acid Test Ratio” or “Quick Ratio“. It is the ratio of liquid assets to current liabilities. The true liquidity refers to the ability of a firm
An asset that can be converted into cash rapidly and with smallest contact to the price received. Liquid assets are generally regarded in the same light as cash because their prices are relatively stable when they are sold on the open market.