Although a full liquidity analysis requires the use of a cash budget,the current and quick ratios provide fast and easy-to-use estimates of a firm's liquidity position.

Question

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The statement is true. Both the current and quick ratios are commonly used as quick measures of a company's liquidity position. While a full liquidity analysis would involve a cash budget, these ratios provide a quick estimate of how well a company can meet its short-term obligations.

Although a Full Liquidity Analysis Requires the Use of a Cash