The higher the quick ratio,the easier it is to pay current liabilities.

Question

Quizplus · Accepted Answer

The quick ratio (also known as the acid test ratio) measures a company's ability to pay off its current liabilities with its quick assets (assets that can be easily converted into cash). A higher quick ratio indicates that a company has more quick assets relative to its current liabilities, meaning it is in a better position to meet its short-term obligations. Therefore, it is true that the higher the quick ratio, the easier it is to pay current liabilities.

The Higher the Quick Ratio,the Easier It Is to Pay