Tom's Toys has a cash balance of $109,000; temporary investments of $42,000; net receivables of $63,000; and inventory of $407,000. Tom's current liabilities total $126,000. His quick (acid test) ratio is: (Round your answer two decimal places.)

Question

Quizplus · Accepted Answer

The quick ratio is calculated by dividing the sum of cash, temporary investments, and net receivables by current liabilities. In this case, the quick ratio is ($109,000 + $42,000 + $63,000) / $126,000 = 1.70 to 1.

Tom's Toys Has a Cash Balance of $109,000; Temporary Investments