Liquidity refers to the ease with which an asset, or security, can be converted into ready cash

without affecting its market price. Cash is the most liquid of assets while tangible items are less
liquid.

The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables.
A good current ratio is between 1.2 to 2, which means that the business has 2 times more current
assets than liabilities to covers its debts. A current ratio below 1 means that the company doesn't
have enough liquid assets to cover its short-term liabilities

The quick ratio indicates a company's capacity to pay its current liabilities without needing to
sell its inventory or get additional financing. The quick ratio is considered a more conservative
measure than the current ratio, which includes all current assets as coverage for current
liabilities.
The higher the quick ratio, the better the position of the company. The commonly acceptable
current ratio is 1, but may vary from industry to industry. A company with a quick ratio of less
than 1 can not currently pay back its current liabilities; it's the bad sign for investors and partners

The cash ratio is a measurement of a company's liquidity, specifically the ratio of a company's
total cash and cash equivalents to its current liabilities. The metric calculates a company's ability
to repay its short-term debt with cash or near-cash resources, such as easily marketable securities
A ratio above 1 means that a company will be able to pay off its current liabilities with cash and
cash equivalents, and have funds left over. Creditors prefer a high cash ratio, as it indicates that a
company can easily pay off its debt. Although there is no ideal figure, a ratio of not lower than
0.5 to 1 is usually preferred. The cash ratio figure provides the most conservative insight into a
company’s liquidity since only cash and cash equivalents are taken into consideration.

Solvency is the ability of a company to meet its long-term debts and other financial
obligations. Solvency is one measure of a company's financial health, since it demonstrates a
company's ability to manage operations into the foreseeable future. Investors can use ratios to
analyze a company's solvency.
Acceptable solvency ratios vary from industry to industry, but as a general rule of thumb,
a solvency ratio of greater than 20% is considered financially healthy. The lower a
company's solvency ratio, the greater the probability that the company will default on its debt
obligations.