Financial Management What will your outlook towards
maintenance of liquid assets to ensure that the firm has
adequate cash in hands to meet its obligation at all times?
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Answer Posted / sreeram
very good question,
First you need to check is the company having adaquate
working capital for the day to day maintenace for that make
sure the company having Current Ration 2:1
Current Ratio = Current Assets/ Current Liabilities.
If it is more specific fr liquidity tehn check with Quick
ratio/Liquid Ratio
Liquid ratio = Quick Assets/ Quick Liabilities.Idle qould be
1.33:1
Quick Assets = Current Assets - Stock
Quick Liabilities would be Current Liabilities - Bank OD.
This would be sufficient.
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