A company has $23,000 in cash, $41,000 in short-term investments, $240,000 in net current receivables, and $75,000 in inventory. The total current liabilities of the firm are $298,000. The quick ratio of the company is:

Question

Quizplus · Accepted Answer

Quick Ratio = (Cash + Short-term investments + Net current receivables) / Current liabilities
= ($23,000 + $41,000 + $240,000) / $298,000
= $304,000 / $298,000
= 1.02

Therefore, the quick ratio of the company is 1.02.

A Company Has $23,000 in Cash, $41,000 in Short-Term Investments