A company has cash $80,000; temporary investments, $20,000; net receivables, $60,000; and inventory of $450,000. Current liabilities are $200,000. The quick or acid-test ratio is:

Question

Quizplus · Accepted Answer

The quick or acid-test ratio is calculated as (Cash + Temporary Investments + Net Receivables) / Current Liabilities = ($80,000 + $20,000 + $60,000) / $200,000 = $160,000 / $200,000 = 0.80.

A Company Has Cash $80,000; Temporary Investments, $20,000; Net Receivables