Liquidity Financial Ratio Review Exercise Understanding the meaning of financial ratios is critical for various stakeholders both inside and outside a company. Management examines various ratios to measure the effectiveness of the strategies used to manage the company over a given period of time. Money managers and other types of investors use the ratios to determine investment strategies in different types of companies. Using ratios helps you take a consistent look at different types of businesses, large or small, and determine profitability and return on equity. The purpose of this paper is to examine liquidity ratios applied to three companies and understand how the studied ratios reveal liquidity positions. Three types of liquidity ratios Liquidity for a company is “the ability of a company to meet its short-term obligations as they arise” (Walther, Financial Accounting, 2011, chapter 4, p.57 ) Investors and creditors look at a company's liquidity to determine the company's ability to meet its current obligations. Three ratios to consider are the working capital, the current ratio and the quick ratio their annual reports reported to the Securities and Exchange Commission (SEC) will be reviewed. The determination of each company's liquidity position will be discussed based on the results and compared with the management's view indicated in the Annual Reports Inc., Genesco Inc. and ConAgra Foods Inc.Dell Inc. is a global personal and business computer manufacturer located in Round Rock, Texas, and has multiple manufacturing and customer service sites national and global… halfway… they manage current assets to cover current liabilities. All three ratios, when used together, provide a more comprehensive analysis of the health of a company's liquidity position. References US Securities and Exchange Commission, Form 10K, ConAgra Foods Inc., 2011. Retrieved from http://www.sec.gov/Archives /edgar/data/23217/000095012311066520/c64679e10vk.htm US Securities and Exchange Commission, Form 10K, Dell Inc., 2011. Retrieved from http://www.sec.gov/Archives/edgar/data/826083/000095012311025579/d78468 e10vk. htmUS Securities and Exchange Commission, Form 10K, Genesco Inc.,2009 Retrieved from http://www.sec.gov/Archives/edgar/data/18498/000095014409002839/g18346e10vk.htm#113Walther LM (2010). Financial Accounting, dba/Principles of Accounting.comWalther LM (2010). Accounting Cycle Problems Workbook, dba/Principles of Accounting.com