Asked by Xavier Alexandre on May 31, 2024
Verified
(Cash + Temporary investments + Accounts receivable) /Current liabilities
A) Current ratio
B) Working capital
C) Quick assets
D) Quick ratio
E) Record an accrual and disclose in the notes to the financial statements
F) Disclose only in notes to financial statements
G) No disclosure needed in notes to financial statements
Current Liabilities
Short-term financial obligations that are due within one year or within a normal operating cycle.
Quick Ratio
A liquidity metric that indicates a company's ability to cover its current liabilities without selling inventory, calculated as (cash plus marketable securities plus accounts receivable) divided by current liabilities.
Temporary Investments
Short-term investments that a company plans to convert into cash within a short period, typically one year or less.
- Acquire knowledge of the theories and implementations of different financial analysis ratios.
Verified Answer
Learning Objectives
- Acquire knowledge of the theories and implementations of different financial analysis ratios.
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