liquidity Flashcards
(6 cards)
1
Q
what does liquidity mean
A
the ease with which assets can be converted into cash
2
Q
what is the difference between non current and current
A
non current is more than a year. current is less than a year
3
Q
how do you calculate the current ratio
A
current ratio = current assets/current liabilities
4
Q
how do you calculate the acid test ratio
A
acid test ratio = current assets - inventory/current liabilities
5
Q
what does working capital mean
A
the amount of money needed o pay for the day to day trading of a business
6
Q
how do you work out the working capital
A
working capital = current assets - current liabilities
