The current ratio of a firm would equal its quick ratio whenever
A) the firm has no inventory.
B) the firm's inventory is equal to its other current assets.
C) the firm's inventory is equal to its current liabilities.
D) the firm's current ratio is equal to one.

Question

Quizplus · Accepted Answer

The current ratio equals the quick ratio when a firm has no inventory because inventory is excluded from the quick ratio calculation. Both ratios would only include cash, marketable securities, and receivables, making them equal if there's no inventory.

The Current Ratio of a Firm Would Equal Its Quick