Which of the following is considered to be a more stringent measure of a company's ability to pay its current liabilities than the current ratio?

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid test ratio, is a more stringent measure of a company's ability to pay its current liabilities because it only takes into account assets that can be easily converted into cash, such as cash, marketable securities, and accounts receivable, while excluding inventory which may take longer to convert into cash. This provides a more accurate representation of a company's immediate liquidity and ability to meet short-term obligations.

Which of the Following Is Considered to Be a More