_____ shows whether an organization can pay claims of short-term creditors without selling inventory.
A) Quick ratio
B) Current ratio
C) Days sales outstanding ratio
D) Inventory turnover ratio
E) Profit ratio

Question

Quizplus · Accepted Answer

Quick ratio, also known as acid-test ratio, is a financial ratio that measures a company's ability to meet its short-term obligations using its most liquid assets. It excludes inventory, which may be difficult to quickly convert into cash. This ratio gives a more conservative measure of a company's liquidity compared to the current ratio.

_____ Shows Whether an Organization Can Pay Claims of Short-Term