Liquidity refers to a company's cash position, availability of resources to meet short-term cash requirements, and overall ability to obtain cash in the normal course of business. A company is said to be liquid if it has sufficient cash or is capable of converting its other assets to cash in a relatively short period of time so that presently maturing debts can be paid.
Required:
1. Measure the current, quick, and cash flow liquidity ratios, along with the working capital ratio for your company for the last 3 years.
2. What information does your calculation give an investor or creditor? What are the ratio trends?
3. Repeat requirement 1-2 for your competitor and compare the ratios.