Liquidity: the meaning
How many times the company can pay next year's debts with what it has or will collect.
Also called the current ratio. Very high liquidity is safe, but can also mean a lot of idle money.
How to read it
Above 1 is healthy. Below 1 it has to borrow or wait for money to pay its bills.
On Nummo you find this figure in the Figures tab of every company that filed annual accounts, over the years. In the tables, a small card gives this explanation in short.
How to calculate it
current assets ÷ short-term debt (in belgian annual accounts: 29/58 ÷ 42/48)
The item numbers follow the official format of Belgian annual accounts, which builds on the European Accounting Directive.
More: Current ratio and quick ratio: liquidity explained →
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