Asked by taylor harrington on May 07, 2024
Verified
Quick ratio
A) Assess the profitability of the assets
B) Assess how effectively assets are used
C) Indicate the ability to pay current liabilities
D) Indicate how much of the company is financed by debt and equity
E) Indicate instant debt-paying ability
F) Assess the profitability of the investment by common stockholders
G) Indicate future earnings prospects
H) Indicate the extent to which earnings are being distributed to common stockholders
Quick Ratio
A measure of a company's ability to meet its short-term obligations with its most liquid assets, without relying on inventory.
Current Liabilities
Obligations or debts that a company is expected to pay within a year.
Assets
Resources owned or controlled by a business, viewed as providing future economic benefits.
- Comprehend the computation and analysis of different financial indicators.
Verified Answer
VM
Victoria MedranoMay 12, 2024
Final Answer :
E
Explanation :
The quick ratio specifically measures a company's ability to meet its short-term obligations with its most liquid assets, thus indicating its instant debt-paying ability.
Learning Objectives
- Comprehend the computation and analysis of different financial indicators.