Answered: How can you discuss the need for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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How can you discuss the need for liquidity to conduct business for a parts store to someone that doesn't understand the terminology?

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Liquidity is a measurement of ability to pay it's short term obligations which are due within one year . Most liquid assets are cash and cash equivalent. Or we can say it is a measurement that how much current assets are available in the ratio of current liabilities.

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