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liquidity ratio business definition
- A measure of a company's ability to meet its short-term obligations achieved through a comparison of financial variables. See also current ratio, quick ratio, working capital.
- The value of the trading activity in a stock that is required to change the stock's price by 1%. A high ratio indicates the stock has considerable liquidity. A stock's liquidity ratio is of primary importance to institutions and traders that deal in large volume and that wish to avoid securities with a lack of liquidity.
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