PLEASE EXPLAIN THE PHOTO ATTACHED. THANK YOU 1) Liquidity ratiosCompanies use liquidity ratios to measure working capital performance - themoney available to meet your current, short-term obligations.Simply put, companies need liquidity to pay their bills. Liquidity ratios measurea company's capacity to meet its short-term obligations and are a vitalindicator of its financial health. Liquidity is different from solvency, whichmeasures a company's ability to pay all its debts. In the sporting world, Italianfootball club Lazio faces a now-infamous liquidity ratio preventing it fromsigning new players. Italian clubs are required to communicate their liquidityindicator to the football authorities twice a year. This indicator cannot be anylower than a certain threshold set by the football authorities.There are different forms of liquidity ratio.Current ratio: Current Assets / Current LiabilitiesThe current ratio measures how a business's current assets, such as cash, cashequivalents, accounts receivable, and inventories, are used to settle currentliabilities such as accounts payable.Quick ratio (Acid-test ratio): Current Assets - Inventories / Current LiabilitiesAlso known as the acid-test ratio, the quick ratio measures how a business'smore liquid assets, such as cash, cash equivalents, and accounts receivablecan cover current liabilities. This ratio excludes inventories from current assets.A quick ratio of 1 is considered the industry average. A quick ratio below 1 showsthat a company may not be in a position to meet its current obligationsbecause it has insufficient assets to be liquidated. (Acid test refers to a quickand simple test gold miners used to determine whether samples of metal weretrue gold or not. Acid would be added to a sample; if it dissolved, it wasn't gold.If it stood up to the acid, it likely was). From a great real example onthe Street.com see how Apple's Quick Ratio stacks up:Quick Ratio Example: Apple (NASDAQ: AAPL)| The following figures are as of March 27th, 2021, and come from Apple's balancesheet. Numbers are in millions of dollars.Cash and cash equivalents: $38,466Accounts receivable: $18,503Marketable securities: $31,368Current liabilities: $106,385QR = Liquid Assets / Current LiabilitiesQR = ($38,466 + $18,503 +$31,368) / $106,385QR = $88,337 / $106,385QR = 0.83Based on this calculation, Apple's quick ratio was 0.83 as of the end of March2021. This number could be higher if more assets were included in itscalculations.Cash ratio: Cash and cash equivalents / Current LiabilitiesThe cash ratio measures a business's ability to use cash and cash equivalentto pay off short-term liabilities. This ratio shows how quickly a company cansettle current obligations.

Name: PLEASE EXPLAIN THE PHOTO ATTACHED. THANK YOU 1) Liquidity ratiosCompan
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Description: PLEASE EXPLAIN THE PHOTO ATTACHED. THANK YOU 1) Liquidity ratiosCompanies use liquidity ratios to measure working capital performance - themoney available to meet your current, short-term obligations.Simply put, companies need liquidity to pay their

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The following figures are as of March 27th, 2021, and come from Apple's balance sheet. Numbers are in millions of dollars. Cash and cash equivalents: $38,466 Accounts receivable: $18,503 Marketable securities: $31,368 Current liabilities: $106,385 QR = Liquid Assets / Current Liabilities QR = ($38,466 + $18,503 +$31,368) / $106,385 QR = $88,337 / $106,385 QR = 0.83 Based on this calculation, Apple's quick ratio was 0.83 as of the end of March 2021. This number could be higher if more assets were included in its calculations. Cash ratio: Cash and cash equivalents / Current Liabilities The cash ratio measures a business's ability to use cash and cash equivalent to pay off short-term liabilities. This ratio shows how quickly a company can settle current obligations.