Using Liquidity Ratios to Evaluate Financial Performance

Using Liquidity Ratios to Evaluate Financial Performance. You own a landscaping business that has just begun operations. You made several expensive equipment purchases in your first month to get your business started. These purchases very much reduced your cash-on-hand, and in turn, your liquidity suffered in the following months with low working capital and current ratio. Your business is now in its eighth month of operation, and while you are starting to see a growth in sales, you are not seeing a significant change in your working capital or current ratio from the low numbers in your early months. What could you attribute to this stagnancy in liquidity? Is there anything you can do as a business owner to better these liquidity measurements? What will happen if you cannot change your liquidity or it gets worse?
Explain why this applies to business.
Describe how this discussion will change your thought process of how you will view business in the future.
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