What is absolute liquidity?
it is represented by cash and near cash items. It is a ratio of absolute liquid assets to current liabilities.
The absolute liquidity ratio is used to calculate what the company's net worth is. This can be done by summing the total liquid assets of a company (marketable securities, cash in bank) and then dividing the current liabilities.
This ratio is used to determine the absolute liquid position of a firm or company. Absolute liquidity can also be referred to as Super Quick ratio or Cash Position ratio.
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