Use the table for the question(s)below.

-Refer to the balance sheet above.The change in Luther's quick ratio from 2005 to 2006 is closest to:
A)a decrease of 0.10
B)an increase of 0.10
C)a decrease of 0.15
D)an increase of 0.15

Question

Use the table for the question(s)below.
  
-Refer to the balance sheet above.The change in Luther's quick ratio from 2005 to 2006 is closest to:
A)a decrease of 0.10 
B)an increase of 0.10 
C)a decrease of 0.15 
D)an increase of 0.15

Quizplus · Accepted Answer

The quick ratio is calculated as (Current Assets - Inventory) / Current Liabilities. To determine the change, calculate the quick ratio for both years and find the difference. If the quick ratio increased by approximately 0.10 from 2005 to 2006, then option B is correct.

Use the Table for the Question(s)below