If Tim's Tools & Tunes has current assets of $500, inventory of $45, current liabilities of $425, and profit of $250, which of the following is the quick ratio for the business?
A) 1.07
B) 1.28
C) 1.7
D) 2.18

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Current Assets - Inventory) / Current Liabilities. So, for Tim's Tools & Tunes, it would be ($500 - $45) / $425 = $455 / $425 = 1.07.

If Tim's Tools & Tunes Has Current Assets of $500