Liquidity ratios are measures company\'s ability to meet current obligations. Following are the typeas of liquidity ratios (i) Current ratio: Current ratio measures the extent to which current assets meets current liabilities. Formula = Current Assets/current liabilities (ii) Quick Ratio : Quick ratioindicates the extent to which quick assets satisfies current liabilities Formula = Cash and cash equivalents/Current liabilities Solution Liquidity ratios are measures company\'s ability to meet current obligations. Following are the typeas of liquidity ratios (i) Current ratio: Current ratio measures the extent to which current assets meets current liabilities. Formula = Current Assets/current liabilities (ii) Quick Ratio : Quick ratioindicates the extent to which quick assets satisfies current liabilities Formula = Cash and cash equivalents/Current liabilities.