Venture Capital and Private Equity
Liquidity ratios are financial metrics used to evaluate a company's ability to meet its short-term obligations with its most liquid assets. These ratios provide insight into the financial health and operational efficiency of a business, helping investors and creditors assess risk and make informed decisions. By analyzing liquidity ratios, one can understand how well a company can convert its assets into cash to pay off liabilities, which is crucial during financial due diligence processes.
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