This is similar to consumer lending practices where the lender wants the borrower to remain under a certain debt-to-income threshold. A value of 1.0 or higher is good because you can meet all current liabilities with cash from operations. Ultimately, both metrics give investors valuable information about a company’s liquidity and solvency which can help them […]

We may earn a commission when you click on a link or make a purchase through the links on our site. All of our content is based on objective analysis, and the opinions are our own. A business usually shuts down due to a liquidity crisis rather than low or no generation of profits. How […]