The ratio that is sometimes referred to as the quick ratio is the _____.
A) inventory turnover
B) acid-test ratio
C) current ratio
D) debt-to-assets ratio
E) debt-to-equity ratio

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, is a measure of a company's ability to pay off its current liabilities without relying on the sale of inventory. It is calculated by subtracting inventory from current assets and dividing the result by current liabilities. A higher quick ratio indicates a better ability to meet short-term liabilities without sacrificing inventory. Therefore, option B is the correct answer.

The Ratio That Is Sometimes Referred to as the Quick