A company's total assets and total liabilities at the end of the year are as follows: The quick ratio for this company is approximately:
A)1.09.
B)0.80.
C)1.16.
D)0.50.

Question

A company's total assets and total liabilities at the end of the year are as follows:  The quick ratio for this company is approximately:
A)1.09. 
B)0.80. 
C)1.16. 
D)0.50.

Quizplus · Accepted Answer

Quick Ratio = (Current Assets - Inventories) / Current Liabilities
From the balance sheet, we can see that the current assets = 10,000 and inventories = 2,000. Therefore, the quick assets = 8,000.
Also, the current liabilities = 10,000.
Quick ratio = 8,000 / 10,000 = 0.8.

A Company's Total Assets and Total Liabilities at the End