Problem
1- Why is liquidity important in analysis of financial statemetns? Explain its importance from the viewpoint of two users--Creditors and Equity investor.
2- What are the limitations of the current ratio as a measure of liquidity?
3- What are cash-based ratios of liquidity? What do they measure?
4-What is the rule of thumb governing the expected level of current ratio? What risks are there in using this rule of thumb for analysis?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.