A small medical facility sells some old equipment and receives $10,000 in salvage costs. What will happen to its liquidity ratio after that money is posted to the account?

Question

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The liquidity ratio measures a company's ability to pay off its short-term liabilities with its short-term assets. Adding $10,000 to the facility's account increases its short-term assets, thereby improving its liquidity ratio.

A Small Medical Facility Sells Some Old Equipment and Receives