For each item numbered below, identify the letter of the best description by selecting from items a through e below.You may use each letter more than once or not at all.
-Quick ratio
A) Intention is to convert into cash within one year
B) Current assets/current liabilities
C) Current assets - current liabilities
D) Must pay within one year
E) (Cash + marketable securities + accounts receivable) divided by current liabilities

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. It is calculated as (Cash + Marketable Securities + Accounts Receivable) divided by Current Liabilities, making option E the correct description.

For Each Item Numbered Below, Identify the Letter of the Best