An analyst is comparing two companies, a retail bookstore chain and an on-line bookstore. Which of the following liquidity ratios is most likely significantly lower for the retail bookstore?
A) quick ratio
B) current ratio
C) working capital
D) operating cash flow to short-term debt

Question

Quizplus · Accepted Answer

The quick ratio is likely significantly lower for the retail bookstore because it has more inventory, which is not included in the quick ratio calculation, compared to the online bookstore.

An Analyst Is Comparing Two Companies, a Retail Bookstore Chain