Which of the following ratios is a measure of a company's ability to pay all current liabilities if they become due immediately?
A)The acid- test ratio
B)The debt ratio
C)The inventory turnover ratio
D)The times- interest- earned ratio

Question

Quizplus · Accepted Answer

The acid-test ratio, also known as the quick ratio, measures a company's ability to pay its current liabilities without relying on the sale of inventory, thus indicating its immediate liquidity position.

Which of the Following Ratios Is a Measure of a Company's