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Liquidity ratio Josh Smith has compiled some of his personal financial data to determine his liquidity position. The data are as follows. Account Amount Cash
Liquidity ratio
Josh Smith has compiled some of his personal financial data to determine his liquidity position. The data are as follows.
Account Amount
Cash $3,200
Marketable securities 1,000
Checking account 800
Credit card payables 1,200
Short-term notes payable 900
a. Calculate Josh's liquidity ratio.
b. Several of Josh's friends have told him that they have liquidity ratios of about 1.8. How would you analyze Josh's liquidity relative to his friends?
Please provide your own work. Thanks.
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