The liquidity measure provided by the current ratio depends on the conversion of inventory to cash in a reasonable time.

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The current ratio is calculated by dividing current assets by current liabilities, providing a measure of a company's ability to meet its short-term obligations. However, the accuracy of this liquidity measure depends on the ability of the company to convert inventory to cash in a timely manner, as inventory is a current asset that may not be easily converted to cash if it is slow-moving or obsolete. Therefore, the liquidity measure provided by the current ratio is dependent on the inventory turnover ratio, which measures the number of times a company sells and replaces its inventory in a given period.

The Liquidity Measure Provided by the Current Ratio Depends on the Conversion