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The Liquidity Ratios And Their Significance In The Financial Equilibrium Of The Firms

Author

Listed:
  • Ciprian Dan COSTEA

    (Vasile Goldis West University of Arad, Satu Mare branch , Romania)

  • Florin HOSTIUC

    (Alexandru Ioan Cuza University of Iasi, Romania)

Abstract

The year of 2008 was an important inflection point of the world’s economy evolution. Most of the economists talk about a banking crisis, some of them talk about a financial crisis, and a part of them agree that we are facing also a liquidity crisis. Following this idea, the objective of this working paper is to analyze the liquidity ratios and their significance in the financial equilibrium of the firms. The working paper points out the most important liquidity ratios: general liquidity ratio, intermediar liquidity ratio, fast liquidity ratio, acid test, their indicated values, the importance of using the quick-selling value in calculating the ultimate liquidity ratios, the connection of this ratios with the economic equilibrium of the firms. The conclusions underline the importance of permanent monitoring the liquidity ratios, interpreting their values facing the economi c branch the firms are dealing in, and the importance of deep and detailed financial analysis using the ultimate liquidity ratios

Suggested Citation

  • Ciprian Dan COSTEA & Florin HOSTIUC, 2009. "The Liquidity Ratios And Their Significance In The Financial Equilibrium Of The Firms," The Annals of the "Stefan cel Mare" University of Suceava. Fascicle of The Faculty of Economics and Public Administration, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration, vol. 9(1(9)), pages 252-261, June.
  • Handle: RePEc:scm:ausvfe:v:9:y:2009:i:1(9):p:252-261
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