Forecasted financial statements and trend analysis | Evaluating Financial | Colorado College
I believe the liquidity ratios are the most important financial ratios when assessing an organization’s performance. This is because they provide insight into a company’s ability to pay off debts quickly and whether or not it has sufficient funds/assets available to meet any short-term liabilities.
Additionally, higher liquidity also indicates that a business is more efficient at managing its finances thus further improving its reputation with creditors/investors; this in turn can result in greater access to capital for expansion etc., Ultimately this allows companies make better informed decisions going forward–leading improved profitability down line eventually.