The quick ratio is the same as current ratio except it does not consider:

Question

Quizplus · Accepted Answer

The quick ratio is a measure of a company's liquidity and ability to meet short-term obligations. It is calculated by subtracting inventory and prepaid expenses from current assets and then dividing by current liabilities. The purpose of subtracting inventory is to provide a more conservative measure of a company's ability to pay its debts quickly. Therefore, the correct answer is D - inventory.

The Quick Ratio Is the Same as Current Ratio Except