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Liquidity ratio information


Liquidity ratio may refer to:

  • Reserve requirement, a bank regulation that sets the minimum reserves each bank must hold.
  • Quick ratio (also known as an acid test) or current ratio, accounting ratios used to determine the liquidity of a business entity

In accounting, the liquidity ratio expresses a company's ability to repay short-term creditors out of its total cash. It is the result of dividing the total cash by short-term borrowings. It shows the number of times short-term liabilities are covered by cash. If the value is greater than 1.00, it means fully covered.

The formula is the following:

LR = liquid assets / short-term liabilities

Liquidity ratios measure how quickly assets can be turned into cash in order to pay the company's short-term obligations. Following ratios can be considered to measure the liquidity of a firm.

  1. Working Capital
  2. Working Capital Ratio
  3. Current Ratio
  4. Quick Ratio
  5. Absolute Liquid Ratio

and 27 Related for: Liquidity ratio information

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Liquidity ratio

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acid test) or current ratio, accounting ratios used to determine the liquidity of a business entity In accounting, the liquidity ratio expresses a company's...

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Statutory liquidity ratio

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In India, the Statutory liquidity ratio (SLR) is the Government term for the reserve requirement that commercial banks are required to maintain in the...

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Quick ratio

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In finance, the quick ratio, also known as the acid-test ratio is a type of liquidity ratio, which measures the ability of a company to use its near-cash...

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Basel III

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of the Basel Committee on Banking Supervision (BCBS)'s Liquidity Coverage Ratio (LCR). The ratio would apply to certain U.S. banking organizations and...

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Current ratio

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The current ratio is a liquidity ratio that measures whether a firm has enough resources to meet its short-term obligations. It compares a firm's current...

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Liquidity adjustment facility

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mismatches in liquidity. LAF helps banks to quickly borrow money in case of any emergency or for adjusting in their Statutory Liquidity Ratio (SLR)/Cash...

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Financial ratio

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aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt. Activity ratios measure how quickly a firm converts...

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Accounting liquidity

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when they fall due. It is usually expressed as a ratio or a percentage of current liabilities. Liquidity is the ability to pay short-term obligations. For...

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Industry average

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turn its Assets into cash to meet short term debt. The higher the Liquidity ratio, the better flexibility of the business. It shows the amount that company...

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Reserve Bank of India

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the financial sector by a temporal reduced reserve ratio as well as the statutory liquidity ratio. New guidelines were published in 1993 to establish...

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Reserve requirement

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a liquidity management tool, hiked it alongside SLR to navigate 2008 financial crisis. RBI introduced and withdrew Incremental - Cash reserve ratio I-CRR...

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Net stable funding ratio

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also contains two entirely new liquidity requirements: the net stable funding ratio (NSFR) and the liquidity coverage ratio (LCR). On October 31, 2014, the...

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Short interest ratio

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by the number of outstanding shares. The latter concept does not take liquidity into account. A short squeeze can occur if the price of stock with a high...

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Liquidity risk

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Liquidity risk is a financial risk that for a certain period of time a given financial asset, security or commodity cannot be traded quickly enough in...

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Open market operation

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open market operation (OMO) is an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks. The central bank can...

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Financial statement analysis

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remain in business. A few common liquidity ratios are the current ratio and the liquidity index. The current ratio is current assets/current liabilities...

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Liquidity crisis

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In financial economics, a liquidity crisis is an acute shortage of liquidity. Liquidity may refer to market liquidity (the ease with which an asset can...

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Capital adequacy ratio

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LR, Leverage Ratio NSFR, Net Stable Funding Ratio LCR, Liquidity Coverage Ratio "Capital Adequacy Ratio - CAR". Investopedia. Retrieved 2007-07-10. Choudhry...

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Liquidity regulation

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Liquidity regulations are financial regulations designed to ensure that financial institutions (e.g. banks) have the necessary assets on hand in order...

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List of business and finance abbreviations

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Sales, during time period t. S&M – Sales & Marketing SLR – Statutory Liquidity Ratio S&OP – Sales and operations planning SAAS – Software-as-a-Service SAM...

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SLR

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Sébastien Loeb Racing, a French racing team Stanford Law Review Statutory liquidity ratio This disambiguation page lists articles associated with the title SLR...

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Credit risk

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experience, management expertise, asset quality, and leverage and liquidity ratios, respectively. Once this information has been fully reviewed by credit...

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Liquidity premium

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depends on the firm's leverage ratio. Liquidity preference Risk premium Size premium Bowyer, Jerry. "What Is the Liquidity Premium? What Does It Mean?"...

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Lebanese liquidity crisis

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The Lebanese liquidity crisis is an ongoing financial crisis affecting Lebanon, that became fully apparent in August 2019, and was further exacerbated...

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Payments bank

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due to restriction from lending and rules for cash reserve ratio and statutory liquidity ratio which leaves very little space for generating income for...

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ICICI Bank

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rating of Baa1 from Moody's. On 31 March 2019, it had a capital adequacy ratio of 16.8%. ICICI Bank UK PLC offers products and services such as a current...

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Days sales outstanding

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expressed as the following financial ratio: DSO ratio = accounts receivable / average sales per day, or DSO ratio = accounts receivable / (annual sales...

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