We can classify current assets into three categories

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The indicator is essential for the early stages of survival of new companies, as it allows you to know whether or not you are able to meet the operating expenses of the business in its early stages.
It allows you to determine whether the company can begin to invest in its growth or the development of new products. Remember that, without a stable financial base, accelerated business growth becomes unsustainable.
Having a healthy liquidity ratio helps you get new investors or even loans from banking institutions. This is one of the first indicators that economists evaluate to know how your business is doing.
Components of the liquidity ratio
Before calculating the liquidity ratio, you need to understand some basic concepts that are part of the equation. These include current assets and current liabilities, which are defined as follows.

Current assets
Current assets are all the assets and rights that a company has that can be converted into cash in less than a year. It is from these assets that short-term obligations (12 months or less) are covered.

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Treasury assets : These are the most liquid resources owned by the company, as they represent the money held directly in cash or in its bank accounts. This means that they are the resources that can be accessed in the shortest time.
Inventory assets : This category includes all products that the company has in its inventory and which are expected to sell quickly. Materials available to produce goods or services also fall into this category.
Cash assets : Finally, these are assets such as accounts receivable, securities that can be traded with investors or even credits. The important thing in these cases is that the cash can be generated in less than a year.
Current liabilities
In contrast to the previous case, current liabilities represent all list of brazil cell phone number short-term obligations or debts. This includes accounts payable, debts with suppliers, tax payments, and loan payments, among others.

Having a large number of these liabilities reduces the company's liquidity and can affect its financial health. If this is combined with having few current assets, then the business does not have the capacity to borrow and runs the risk of declaring bankruptcy in the event of unforeseen situations.

Types of liquidity ratios
Now that you know what the liquidity ratio is, you need to learn how to use the different variants that exist. Each type of ratio is differentiated by including or excluding one of the components we talked about above (current assets and liabilities).

From this, we obtain several types of ratio that you need to know:

Overall Liquidity Ratio : As its name suggests, this is the most widely used indicator, as well as the easiest to calculate. It is obtained by directly comparing all current assets with current liabilities and gives a very general overview of the company's situation.
Acid test ratio or immediate liquidity : this indicator is essential for those companies that have problems selling part of their inventory in a short time. For this reason, only treasury and realizable assets are considered in the calculation, which represent the resources that can be obtained more quickly.