acct3303 12&13

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 1- Why is liquidity important in analysis of financial statemetns? Explain its importance from the viewpoint of two users--Creditors and Equity investor.


2-What are the limitations of the current ratio as a measure of liquidity?


3- What are cash-based ratios of liquidity? What do they measure?


4-What is the rule of thumb governing the expected level of current ratio? What risks are there in using this rule of thumb for analysis?

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