Asked by Blake cannistraro on May 26, 2024
Verified
The quick ratio is the same as current ratio except it does not consider:
A) cash.
B) accounts receivable.
C) prepaid items.
D) inventories.
Quick Ratio
Current assets less inventories divided by current liabilities. A financial ratio that measures a firm’s liquidity, the ability to pay its bills in the short run, without depending on converting inventory into cash. Also called the Acid Test.
Current Ratio
The Current Ratio is a financial metric used to evaluate a company's ability to pay its short-term liabilities with its short-term assets, indicating liquidity.
Prepaid Items
Expenses paid in advance for goods or services to be received in the future.
- Grasp the critical role financial ratios play in evaluating a corporation's operational success and financial robustness.
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Learning Objectives
- Grasp the critical role financial ratios play in evaluating a corporation's operational success and financial robustness.
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