Liquidity Meaning, Significance, Types, Measures, Management

Non-current assets include non-current investments and long-term receivables. A positive ratio indicates the company pays its short-term obligations after liquidating current assets. A negative ratio means current liabilities exceed current assets and indicates closing entries and post financial distress. Yes, a current ratio of 2 is typically considered a good level of liquidity. Accounting Crash Courses A higher liquidity ratio generally indicates a lower risk of default, making the company…