Liquidity refers to a company's ability to meet its current obligations. When analyzing liquidity, we review how easily current assets can convert to cash to pay current liabilities. It is desirable to have a margin of safety to allow for shrinkage of value of current assets (for items like receivables and inventories). 

The following ratios help us analyze liquidity:

Quick Ratio
Current Ratio
Working Capital

This calculation is available within the CASH|Suite Insight Application to assess financial capacity and risk.