A company has $8,000 in cash, $9,250 in accounts receivable, and $19,500 in inventory. If current liabilities are $14,350, then the quick ratio would be
A) 2.6 to 1
B) 2.0 to 1
C) 1.2 to 1
D) 5.0 to 1

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Cash + Accounts Receivable) / Current Liabilities. Here, it is ($8,000 + $9,250) / $14,350 = $17,250 / $14,350 = 1.2 to 1.

A Company Has $8,000 in Cash, $9,250 in Accounts Receivable