Illustrates reserves are real money or not
The part of the net income which is not distributed to shareholders goes to reserves (to shareholders’ equity). As dividends shows real money, reserves are real money as well. Is it true?
Expert
No, it is not true. The part of the net income which is not distributed to shareholders goes to reserves to the shareholders’ equity. When dividends shows real money that reserves are also real money.
Liquidity Ratios: Such ratios comprise the Current Ratio and the Quick Ratio or the acid test ratio. Liquidity ratios demonstrate the Liquid position of a company in the short term that is the capability of a firm to pay its obligations in short term.
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