The ________ ratio measures the ability of a company to pay all current liabilities if they came due immediately.
A)inventory turnover
B)current
C)day's sales in receivables
D)acid-test

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, excludes inventory from current assets and measures a company's ability to pay all current liabilities using only its most liquid assets (cash, marketable securities, and accounts receivable). It is a more stringent measure of liquidity than the current ratio.

The ________ Ratio Measures the Ability of a Company to Pay