A company has liquid assets of $5 million and net income of $10 million.Current liabilities total $2.5 million,interest expense is $2 million,and income tax expense is $3 million.What is the quick ratio for the company?
A)0.5
B)7.5
C)0.3
D)2.0

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Liquid Assets / Current Liabilities). Here, it is $5 million / $2.5 million = 2.0.

A Company Has Liquid Assets of $5 Million and Net