Asked by Heather Robertshaw on Apr 25, 2024
Verified
Data from Yochem Corporation's most recent balance sheet appear below: 
Required:
Compute the company's acid-test (quick)ratio.Show your work!
Acid-test Ratio
A liquidity metric that measures a company's ability to pay off its current liabilities with its most liquid assets, without relying on the sale of inventory.
- Evaluate a business's short-term financial health through an analysis of working capital, current ratio, and acid-test ratio.
Verified Answer
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Ashly De Leon7 days ago
Final Answer :
Acid-test ratio = Quick assets* ÷ Current liabilities
= $79,000 ÷ $109,000 = 0.72
*Quick assets = Cash + Marketable securities + Accounts receivable + Short-term notes receivable
= $16,000 + $24,000 + $39,000 = $79,000
= $79,000 ÷ $109,000 = 0.72
*Quick assets = Cash + Marketable securities + Accounts receivable + Short-term notes receivable
= $16,000 + $24,000 + $39,000 = $79,000
Learning Objectives
- Evaluate a business's short-term financial health through an analysis of working capital, current ratio, and acid-test ratio.
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