Average current assets minus average inventories when divided by average current liabilities is called which of the following ratios?
A) current ratio
B) quick ratio
C) net working capital ratio
D) current liabilities to total debt ratio

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventories.

Average Current Assets Minus Average Inventories When Divided by Average