The quick ratio improves upon the current ratio by
A) using more up-to-date information.
B) simplifying the calculation.
C) subtracting intangible assets like goodwill.
D) recognizing that inventory is the current asset that is easiest to value.
E) recognizing that inventory is the least liquid current asset.

Question

Quizplus · Accepted Answer

Since inventory may not always be easily converted into cash, the quick ratio is a more conservative measure of liquidity.

The Quick Ratio Improves Upon the Current Ratio by