Explanation of Cash Flow Liquidity Ratio:

The Cash Flow Liquidity Ratio compares Cash, Marketable Securities, and Cash Flow from Operations to the Current Liabilities of the company.  This ratio measures how well a company can handle its short-term debt with its cash and other liquid assets

Importance of Cash Flow Liquidity Ratio:

Many different things can affect this ratio both positively and negatively, as Current Liabilities make up several liabilities of the company.  A larger Cash Flow Liquidity Ratio is desired.

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