Liquidity ratios measure the short-term ability of the company to pay its maturing obligations and to meet unexpected needs for cash.
Current ratio The current ratio is a widely used measure for evaluating a company’s liquidity and short-term debt-paying ability. The ratio is computed by dividing current assets by current liabilities. A high current ratio indicates that a company has sufficient current assets to pay current liabilities as they become due. The 2016 ratio of 0.79:1 means that for every dollar of current liabilities, General Mills had $0.79 of current assets. The current ratio increased from 0.75:1 in 2015. Compared to the industry average of 1.83:1, General Mills appeared to be less liquid.
Acid-test (quick) ratio This

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