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Three Measures of Liquidity Are Working Capital,current Ratio,and Acid-Test Ratio

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Essay

Three measures of liquidity are working capital,current ratio,and acid-test ratio.What do each of these measure,and how are they each calculated?


Definitions:

Means-Ends

An analysis or approach that focuses on identifying the means to achieve a desired end or goal.

Coordinated

Actions or efforts that are managed in such a way as to ensure efficiency and harmony in achieving a goal.

Effective Control

The process or system put in place to guide activities towards achieving organizational goals efficiently and effectively.

Internal

Occurring or existing within an organization or entity.

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