Getting the total of cash, marketable securities, and receivables and then dividing that total by the current liabilities results in the _____.
A) debt-to-equity ratio
B) debt-to-assets ratio
C) current ratio
D) acid-test ratio
E) inventory turnover

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay off its current liabilities without relying on the sale of inventory. It is calculated by adding cash, marketable securities, and receivables, then dividing by current liabilities.

Getting the Total of Cash, Marketable Securities, and Receivables and Then