The Cash Ratio Is Usually a Good Indication of the Liquidity

question 48

True/False

The cash ratio is usually a good indication of the liquidity of the firm.

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Definitions:

Floor

In finance, the lowest possible value or limit for prices, wages, or other financial variables.

Personal Casualty Loss

Financial loss resulting from the damage, destruction, or loss of an individual’s property from sudden, unexpected, or unusual events.

Deduction

An amount that can be subtracted from gross income to reduce the total taxable income, leading to lower tax liability.

Federally Declared Disaster Area

An area officially designated by the Federal Emergency Management Agency (FEMA) where significant damage has occurred due to natural or man-made disasters, making it eligible for federal aid.