Liquidity Reference: Ratio, Quality, Timing

RQT What does RQT stand for in liquidity reading? Cash versus inventory as liquidity Both can be current assets; only one is already payment capacity. “The current ratio is above 2.0x, so we are done.” Your line Good start. What portion is cash or collectible receivables, and what obligations mature first? Letting a threshold replace judgment. It keeps the ratio but adds quality and timing. What makes receivables less liquid than they look? Slow aging, disputes, concentration, extended terms, or weak post-period collections. Receivables are liquidity when customers pay.

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