though Firm A's current ratio exceeds that of Firm B, Firm B's quick ratio might exceed that of A However, if A's quick ratio exceeds B's, then we can be certain that A's current ratio is also larger than that of B.

Question

Quizplus · Accepted Answer

The quick ratio excludes inventory from current assets, so Firm A could have a higher quick ratio than Firm B due to less inventory, but Firm B could still have a higher current ratio if it has more inventory.

Though Firm A's Current Ratio Exceeds That of Firm B