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Answer Posted / vandana
Total dollar value of cash and marketable securities
divided by current liabilities. For a bank this is the cash
held by the bank as a proportion of deposits in the bank.
The liquidity ratio measures the extent to which a
corporation or other entity can quickly liquidate assets
and cover short-term liabilities, and therefore is of
interest to short-term creditors. also called cash asset
ratio or cash ratio.
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