Excel: Liquidity Ratios - Current Ratio, Quick Ratio, & Cash Ratio

A liquidity ratio is a type of Financial Ratio that determines if a company can pay its short-term debt and obligations with its current assets. The higher the liquidity ratio, the better. We will look at three liquidity ratios - current ratio, quick ratio, and cash ratio. All three ratios use the balance sheet.
Chapters:
0:00 Intro
0:25 What are liquidity ratios?
1:03 Microsoft Balance Sheet
1:40 Current Ratio
2:17 Name Range
3:20 Quick Ratio
4:15 Cash Ratio
What are Current Assets?
A liquidity ratio is used to determine if a company can pay its short-term financial obligations with its current assets. Current Assets consist of cash and other assets expected to be converted to cash within a year.
Examples of Current Assets:
Cash
Cash Equivalents
Accounts Receivable
Inventory
Prepaid Expenses
Other Liquid Assets
Liquidity Ratios
1) Current Ratio
2) Quick Ratio
3) Cash Ratio
Chris Menard will speak at The Southeastern Accounting Show (SEAS). This is GSCPA’s premier event, providing you with a high-quality education in multiple interest areas.
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Blog post on Liquidity Ratios
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[@ChrisMenardTraining]

Blog post chrismenardtraining.com/post/liquidity-ratios

[@Montanho09]

Im studying for my my Laws exam coming up this next Wednesday and this clarified my confusion about these three items - Thanks for posting it!

[@ChrisMenardTraining]

Glad to help. Good luck on your exam.

[@christinenguyen3405]

This was SO easy to understand. Thank you so much!

[@Emancipation240]

Could I use "Advance income tax" as a current asset or noncurrent assets? Could I incorporate it in Quick ratios??