Piper Inc. has cash of $62,000; net Accounts Receivable of $74,000; short-term investments of $15,000 and inventory of $67,000. It also has $51,000 in current liabilities and $73,000 in long-term liabilities. The quick ratio for Piper Inc. is:

Question

Quizplus · Accepted Answer

The quick ratio is calculated as quick assets (cash, short-term investments, and net accounts receivable) divided by current liabilities.

Quick assets = $62,000 + $15,000 + ($74,000 - $0) = $151,000

Quick ratio = $151,000 / $51,000 = 2.96

Therefore, the best choice is C with an explanation as shown above.

Piper Inc Has Cash of $62,000; Net Accounts Receivable of $74,000;