Zidane Enterprises has a current ratio of 1.92, current liabilities of $272,934, and inventory of $197,333. What is the firm's quick ratio? Round your final answer to two decimal places.
A) 0.72
B) 1.20
C) 1.92
D) None of the above

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Current Assets - Inventory) / Current Liabilities. First, find the current assets using the current ratio: Current Assets = Current Ratio * Current Liabilities = 1.92 * $272,934 = $524,036.48. Then, Quick Assets = Current Assets - Inventory = $524,036.48 - $197,333 = $326,703.48. Finally, Quick Ratio = Quick Assets / Current Liabilities = $326,703.48 / $272,934 = 1.20.

Zidane Enterprises Has a Current Ratio of 1