High current and quick ratios ALWAYS indicate that a firm is managing its liquidity position well.

Question

Quizplus · Accepted Answer

While high current and quick ratios may indicate that a firm has good liquidity, it does not necessarily mean that the firm is managing its liquidity position well. High ratios could be due to factors such as low levels of inventory or a large amount of cash reserves, but these may not necessarily be managed effectively in the long term. Effective liquidity management involves not only having high liquidity ratios, but also using the liquidity effectively to generate profits and grow the business.

High Current and Quick Ratios ALWAYS Indicate That a Firm