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Short-Term Liquidity Ratio


A financial ratio that is intended to provide information about a firm’s solvency or liquidity over the short run, i.e., its ability to meet short-term requirements for payment of obligations without undue stress. Mainly, short-term liquidity ratios focus on current assets and current liabilities. These ratios concern short-term creditors, in their attempt to ensure a borrowing firm is able to meet its short-term obligations (loans, bills, etc.). The most common ratios include:

Short-term liquidity ratios are also known as short-term solvency ratios.



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The financial analysis of companies is essentially undertaken with the aim to assess their performance in light of their objectives and strategies ...
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