Which of the following statement is correct regarding the quick ratio?
A)The numerator for the quick ratio is current assets minus inventory minus accounts receivable.
B)The numerator for the quick ratio is current assets.
C)The quick ratio is also called the working capital ratio.
D)The quick ratio is a more conservative variation of the current ratio.

Question

Quizplus · Accepted Answer

The quick ratio,also known as the acid-test ratio,is a conservative variation of the current ratio.The quick ratio is computed by dividing quick assets by current liabilities.Only cash,receivables,and current marketable securities (quick assets)are included in the numerator.

Which of the Following Statement Is Correct Regarding the Quick