Home › Subjects › O-Level Principles of Accounts › Judging liquidity
O-Level Judging liquidity
What the O-Level syllabus expects for Judging liquidity, and how to practise it.
What the syllabus expects
- Explain why staying liquid matters
- Set out and clarify how liquidity differs from profitability
- Name and compute working capital
- Break down what makes up total current assets and total current liabilities
- Read what the current asset and current liability items indicate over up to three years
- Judge a business's liquidity from how working capital and its current asset and current liability items move over up to three years
- Suggest ways to strengthen liquidity
- Name and compute the liquidity ratios
Scope: current ratio, quick ratio - Read what the liquidity ratios show over up to three years or against another business
- Judge liquidity from the trend in liquidity ratios over up to three years or beside one other business
- Suggest ways to improve the liquidity ratios
More O-Level Principles of Accounts topics
Roles of accounting and of accountants · Stakeholders and what they need in order to decide · Judging profitability · Judging efficiency of inventory and trade receivables management · Kinds of business · Forms of business ownership · all of O-Level Principles of Accounts