Content Integration Inc.has $25,000 in cash,$40,000 in short-term investments,$55,000 in net current receivables,and $12,000 in prepaid expenses.The total current liabilities of the firm are $190,000.Jupiter Precision's acid-test ratio is:

Question

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The acid-test ratio is calculated as (Cash + Short-term investments + Net current receivables) / Current liabilities. Here, it is ($25,000 + $40,000 + $55,000) / $190,000 = $120,000 / $190,000 = 0.63.