Liquidity ratios are used to measure a company's ability to repay its short-term debt obligations. This is done by comparing a company's most liquid assets to its short-term liabilities. When the coverage of liquid assets is greater than short-term liabilities, it is a better indicator of whether a company can pay off its debts coming due in the near future. Two common ratios used by analysts are the quick ratio and the current ratio. Below are Lincoln Electrics trend lines for the quick and current ratio from 1988 to 2012. The two line charts are parallel to each other because the quick ratio is a component of the current ratio. Over the years, Lincoln's liquidity ratios have been shown to have low numbers in years when they were suffering financially. For example, the current ratio and quick ratios had a sharp decline in 1993 when they had financial problems and again in 2001 during the bursting of the dot.com bubble. Lincoln also shows fluctuating ratios over the years and the highest ratios are recorded in 2009 and 2010. Efficiency AnalysisEfficiency ratios are used to analyze how a company uses its assets....