Z-Mart's quick assets are $147,000.With current liabilities of $143,000,Z-Mart's acid-test ratio is 1.03 to 1.

Question

Quizplus · Accepted Answer

The formula for acid-test ratio (also known as quick ratio) is:

Quick Ratio (acid-test ratio) = (Current Assets - Inventory - Prepaid Expenses) / Current Liabilities

Given that Z-Mart's quick assets are $147,000, which includes current assets that can be quickly converted to cash such as cash, marketable securities, and accounts receivable, we can assume that the inventory and prepaid expenses are not included in this calculation.

If the quick ratio is 1.03 to 1, it means that for every $1 of current liabilities, Z-Mart has $1.03 of quick assets, which is a good sign of its ability to cover its short-term obligations. Therefore, the statement is true.

Z-Mart's Quick Assets Are $147,000