What is Short Term Solvency Ratio?

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Short-term Solvency Ratios – It’s a ratio to measure the firm’s ability to meet short-term financial obligations. With this the firm will avoid financial distress in the short-run. There are two most important Short-term Solvency Ratios
1. Current Ratio.
2. Quick Ratio.

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anil joshi

  • Feb 2nd, 2013

Ratios used to judge the adequacy of liquid assets for meeting short-term
obligations as they come due, including
1) the current ratio,
2) the acid-test ratio,
3) the inventory turnover ratio, and
4) the accounts receivable turnover ratio.

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