The quick ratio is similar to the current ratio in that it is also a measure used to evaluate whether a company can pay its current liabilities.

Question

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The statement is true. The quick ratio is a liquidity ratio that assesses a company's ability to pay its short-term obligations with its most liquid assets. It measures the company's ability to meet its current liabilities without relying on the sale of inventory or other less liquid assets.

The Quick Ratio Is Similar to the Current Ratio in That