Convex Industries has inventories of $150 million, current assets of $1.05 billion, and current liabilities of $400 million. What is its quick ratio?
A)2.25
B)2.12
C)0.44
D)0.38

Question

Quizplus · Accepted Answer

The quick ratio is calculated as (Current Assets - Inventories) / Current Liabilities. For Convex Industries, this is ($1.05 billion - $150 million) / $400 million = $900 million / $400 million = 2.25.

Convex Industries Has Inventories of $150 Million, Current Assets of $1.05