Examlex
What are mnemonics?
Economic Earnings
The real flow of cash that a firm could pay out without impairing its productive capacity.
Liquidity Ratio
A financial metric used to determine a company's ability to pay off its short-term debts with its current assets.
Current Ratio
Current assets/current liabilities. Measures the ability of the firm to pay off its current liabilities by liquidating current assets.
Acid Test
A stringent test that measures the liquidity of a company by calculating its quick assets (excluding inventory) against its current liabilities.
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