There is no such thing as a liquidity ratio being too high.

Question

Quizplus · Accepted Answer

While having a high liquidity ratio may be seen as a positive sign for a company's financial health, an excessively high liquidity ratio may indicate that the company is not utilizing its resources efficiently and may be missing out on potential investment opportunities. Additionally, a very high liquidity ratio may also suggest that the company is not effectively managing its working capital and may be holding onto excess cash reserves that could be used for other purposes such as expansion, research and development or acquisitions.

There Is No Such Thing as a Liquidity Ratio Being