Question: if a company is considered quotvery liquidquot or quothighly solventquot...
If a company is considered "very liquid" or "highly solvent" for the year, this means it:
|Must sell off its major fixed assets in order to stay in business.|
|Has an extremely low acid test (quick) ratio.|
|Is able to pay its current debts as they come due using its current assets.|
|Has a current ratio that is less than one.|