Liquidity ratios

IB Business Management: Liquidity ratios

This section of the IB Business Management syllabus looks at liquidity ratios (AO2, AO4) and examines the possible strategies to improve these financial ratios (AO3).Liquidity ratios are financial ratios that examine an organization’s ability to pay its short-term liabilities and debts. The IB Business Management syllabus specifies the following two liquidity ratios:• Current ratio• Acid test ratio (also...

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