Quick Ratio Quiz

The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity and ability to meet its short-term liabilities using its most liquid assets.

The quick ratio is calculated by adding together a company's cash, cash equivalents, and marketable securities, and then dividing that sum by the company's current liabilities.

A high quick ratio indicates that a company has a strong ability to cover its short-term liabilities without relying on the sale of its inventory or other less liquid assets.

<p>The quick ratio, also known as the acid-test ratio, is a measure of a company's short-term liquidity and ability to meet its short-term obligations using its most liquid assets, excluding inventory.</p> Signup and view all the answers

<p>The quick ratio is calculated by adding cash, marketable securities, and accounts receivable, and then dividing the total by current liabilities.</p> Signup and view all the answers

<p>The quick ratio is considered a more rigorous test of liquidity than the current ratio because it excludes inventory, which may not be as easily convertible to cash in the short term.</p> Signup and view all the answers