Generally speaking, the larger a company's inventory, the larger the difference between its current ratio and quick ratio.

Question

Quizplus · Accepted Answer

The quick ratio excludes inventory from current assets, unlike the current ratio. Therefore, a larger inventory increases the difference between these two ratios, as the quick ratio will be lower relative to the current ratio when inventory is significant.

Generally Speaking, the Larger a Company's Inventory, the Larger the Difference