A firm's current ratio is always higher than its quick ratio (for the same accounting period).

Name: A firm's current ratio is always higher than its quick ratio (for the same accounting period).
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Question

Quizplus · Accepted Answer

The current ratio includes inventory and prepaid expenses in its calculation, while the quick ratio only includes liquid assets such as cash and accounts receivable. Therefore, the current ratio will always be higher than the quick ratio.

A Firm's Current Ratio Is Always Higher Than Its Quick