From an ongoing perspective, the company's new ratio might be more indicative of liquidity than either the current ratio or the quick ratio.

Question

Quizplus · Accepted Answer

The new ratio, depending on its components, could be designed to provide a more accurate measure of liquidity by focusing on the most liquid assets or by better reflecting the company's specific liquidity situation. Current and quick ratios are general measures and might not capture all nuances of a company's liquidity position.

From an Ongoing Perspective, the Company's New Ratio Might Be