Which of the following ratios is calculated by dividing liquid assets by current liabilities?
A)Current ratio.
B)Quick ratio.
C)Turnover ratio.
D)Working capital ratio.

Question

Quizplus · Accepted Answer

Dividing liquid assets by current liabilities gives us the quick ratio, also known as the acid test ratio. The quick ratio measures a company's ability to pay its immediate financial obligations without having to sell its inventory or other long-term assets.

Which of the Following Ratios Is Calculated by Dividing Liquid