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The Quick Ratio Is Considered More Useful Than the Current

Question 1

Multiple Choice

The quick ratio is considered more useful than the current ratio for:


A) Evaluating the profitability of a business that sells inventory very quickly, such as a restaurant.
B) Evaluating the solvency of a business that turns inventory into cash very slowly, such as a shipbuilder.
C) Evaluating long-term credit risk.
D) Evaluating investors' expectations concerning future earnings.

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