Use the table for the question(s)below.

-Refer to the statement of financial position above.The change in Luther's quick ratio from 2014 to 2015 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
E)being unchanged

Question

Use the table for the question(s)below.
  
-Refer to the statement of financial position above.The change in Luther's quick ratio from 2014 to 2015 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 
E)being unchanged

Quizplus · Accepted Answer

Quick ratio = (Current Assets - Inventory) / Current Liabilities
In 2014: 
Quick ratio = (9,000 - 3,000) / 6,000 = 1
In 2015: 
Quick ratio = (14,000 - 4,000) / 10,000 = 1
The quick ratio increased from 1 to 1.1, which is an increase of 0.1. Therefore, the answer is B.

Use the Table for the Question(s)below