The quick ratio, often referred to as the acid-test ratio, measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory. It's calculated as (cash + ...

One of the key indicators investors use to assess a company's financial health is the liquidity ratio. This financial metric provides insight into a company’s ability to meet its short-term ...

Financial ratios are calculations that compare two (or more) pieces of financial data that are normally found in a company's financial statements. Ratios can be invaluable to investors making ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

Before you jump into any investment, it's important to determine if a company can maintain its liquidity and remain solvent over time. Liquidity and solvency ratios work together, but they shouldn't ...

Liquidity ratios are tools that show how well an organization can meet its short-term obligations, like rent, payroll, and immediate operating expenses. In the for-profit world, these ratios help ...

The defensive interval ratio (DIR) is a financial metric that can help investors assess a company's ability to meet its short-term operating expenses using its liquid assets. Also known as the basic ...

Opinions expressed by Entrepreneur contributors are their own. Everything in business is relative. The numbers for your profits, sales, and net worth need to be compared with other components of your ...