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Liquidity Ratio Josh Smith has compiled some of his personal financial data in order to determine his liquidity position. The data are as follows. Account

Liquidity Ratio

Josh Smith has compiled some of his personal financial data in order 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 Joshs liquidity ratio. b. Several of Joshs friends have told him that they have liquidity ratios of about 1.8. How would you analyze Joshs liquidity relative to his friends?

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