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what it means when company A liquidity ratio is 99% and company B is 65 %

what it means when company A liquidity ratio is 99% and company B is 65 %

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Liquidity ratio is which is used to determine a company's ability to pay off current debt without raising any funds from external capital. is shows the ability of how a company can convert its assets quickly.

In the current scenario, Company A's liquidity ratio is 99% indicates it has 99% of current assets available to cover every $1 of current liabilities. Whereas, Comapny B indicates it has 65% of current assets available to cover every $1 of current liabilities.  

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