Which type of ratio measures a firm's ability to pay off short-term obligations without relying on inventory sales?
A) cash
B) current
C) internal-growth
D) quick or acid-test

Question

Quizplus · Accepted Answer

The quick or acid-test ratio specifically measures a firm's ability to pay off short-term obligations without relying on the sale of inventory, as it excludes inventory from current assets in its calculation.

Which Type of Ratio Measures a Firm's Ability to Pay