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today we inshallah at the end of this lesson we will be able to calculate the liquidity ratios the current ratio and quick ratio secondly we will be able to comment on the ratio results how to docHub a conclusion so lets start off with liquidity ratios again uh there are two ratios current ratio quick ratio quick recap these ratios tells you whether the business is able to pay short-term liabilities the formula is current assets divided by current liabilities how many times the current assets are of current liabilities this is what this ratio tells us quick ratio is just going to focus on whether we have enough cash or trade receivables we are going to take inventory out just to see whether our liquid assets are able to pay the current liabilities okay the answer will be expressed as ratios as fractions find out to calculate the current ratio i need the statement of financial position so first of all i need to find what my current assets are so clearly my inventories are given accounts