A grocery store chain with a high current ratio but a low quick ratio probably does not have a serious liquidity problem and would likely have little trouble selling inventory to meet the obligations of current liabilities.

Question

Quizplus · Accepted Answer

A high current ratio indicates that the company has enough current assets to cover its current liabilities, while a low quick ratio suggests that the company relies heavily on inventory to meet its short-term obligations. Therefore, the company could easily sell its inventory to generate cash and pay off its current liabilities without facing serious liquidity issues.

A Grocery Store Chain with a High Current Ratio but a Low