Kaplan has a current ratio of 2.5 to 1 and current liabilities of $12 000. If Kaplan has $9000 of inventory what is the quick ratio?
A) 2.25 to 1
B) 2.00 to 1
C) 1.75 to 1
D) 1.50 to 1

Question

Quizplus · Accepted Answer

Quick ratio excludes inventory from current assets, so we need to subtract the inventory from the numerator. 
Quick ratio = (Current assets - Inventory) / Current liabilities
Quick ratio = ($9000) / $12 000
Quick ratio = 0.75
Quick ratio = 1.75 to 1 (rounded to the nearest hundredth)

Kaplan Has a Current Ratio of 2