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    Fundamental Accounting Principles

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    Give an example of one accrual-based ratio and one cashbased ratio to measure these characteristics of a company:(a) liquidity, (b) solvency, and (c) profitability.

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    Hi there,
    <br>
    <br>Liquidity:
    <br>Cash + Securities / Current Liabilities
    <br>Total dollar value of cash and marketable securities divided by current liabilities. For a bank this is the cash held by the bank as a proportion of deposits in the bank. The liquidity ratio measures the extent to which a corporation or other entity can quickly liquidate assets and cover ...

    Solution Summary

    This question involves the fundamentals of accounting.

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