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please help questions 4 5 6 9
ments allow a finance manager 4. What are liquidity ratios? Give an example of a liquidity ratio and how i helps evaluate a c
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4.

Liquidity ratios help to analyze if the company is in a situation to meet its current liability obligations or not. The example of liquidity ratios are Current Ratio, Quick Ratio, Cash Ratio.

Current Ratio = Current Assets/Current Liabilities

It helps to evaluate the company's past and future performance by comparing the extent of liabilities against the assets of the firm. Thus a low ratio as compared to past performance might signal a risk for the company and vice versa.

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