The first liquidity ratio we examined in digesting Axel Tracy's book, "Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to Analyse Any Business on the Planet," was the current ratio.

The worst news investors can get is that a company whose stock they own has gone bankrupt. As cataclysmic as bankruptcy can be, there are usually warning signs that astute investors can look for ...

The quick ratio, also known as the acid-test ratio, measures a company's ability to pay off its current debt. Current debt includes any liabilities coming due within a year, like accounts payable and ...

The acid-test ratio (which is sometimes called the quick ratio) compares short-term assets with short-term liabilities to see if a company has enough cash on hand to cover payments due. The acid-test ...