How do assets, liabilities, and liquidity ratios measure financial position?

"Assets are things of value owned by a firm. Current assets are assets that can or will be converted to cash within the next 12 months. Fixed assets are long-term assets used by a firm for more than a year such as land, buildings, and machinery. Current liabilities are short-term claims that are due within a year of the date of the balance sheet. The current ratio is the ratio of total current assets to total current liabilities; used to measure a firm’s liquidity. The acid-test, or quick, ratio is the ratio of total current assets excluding inventory to total current liabilities; used to measure a firm’s liquidity."