A company's liquidity can be evaluated by analyzing the company's current assets.

Question

Quizplus · Accepted Answer

Current assets are assets that can be easily converted into cash within a year, such as cash, accounts receivable, and inventory. By analyzing the company's current assets, we can determine if the company has enough cash or assets that can be quickly converted into cash to meet its short-term obligations. This helps evaluate the company's liquidity, which refers to its ability to meet its financial obligations in the short-term.

A Company's Liquidity Can Be Evaluated by Analyzing the Company's