What is true of Liquidity ratios?

Liquidity ratios are calculated to determine medium-term solvency of business. Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders. Both 1 and 2 None of the above

Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders.

Liquidity Ratios: Liquidity ratios are calculated to determine short-term solvency of business. Analysis of current position of liquid funds determines the ability of the business to pay the amount due to its stakeholders.