The quick ratio is measured as:
A)current assets divided by current liabilities.
B)cash on hand plus current liabilities,divided by current assets.
C)current liabilities divided by current assets,plus inventory.
D)current assets minus inventory,divided by current liabilities.
E)current assets minus inventory minus current liabilities.

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations using only its most liquid assets. The formula for calculating the quick ratio is: (Current Assets - Inventory) / Current Liabilities. Therefore, Choice D is the correct answer as it represents this formula. The other choices do not reflect the correct calculation of the quick ratio.

The Quick Ratio Is Measured As