A firm has a higher quick (or acid test)ratio than the industry average,which implies.
A) the firm has a higher P/E ratio than other firms in the industry
B) the firm is more likely to avoid insolvency in short run than other firms in the industry
C) the firm may be less profitable than other firms in the industry
D) a and b
E) b and c

Question

Quizplus · Accepted Answer

A higher quick ratio indicates that the firm has more liquid assets relative to its current liabilities, which makes it more likely to avoid insolvency in the short run.

A Firm Has a Higher Quick (Or Acid Test)ratio Than