Absolute Liquid Ratio (ALR) goes one step further than your
Quick Ratio. It removes accounts receivable from your current assets used to
calculate the ratio, leaving only absolutely
liquid assets. Which makes ALR the most meaningful ratio of all these
three.
Basically, it tells whether you have enough cash and cash equivalents (you can pay your current liabilities with
your marketable securities) to cover all your short-term financial obligations
should they come due at the same time and in full amount. Although this
scenario is, in reality, highly unlikely.
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