The quick ratio is used to determine an entity's:
A) liquidity.
B) profitability.
C) efficiency.
D) performance.

Question

Quizplus · Accepted Answer

The quick ratio, also known as the acid-test ratio, measures an entity's ability to pay off its current liabilities using its most liquid assets. This ratio is a measure of liquidity, as it indicates whether the company can meet its short-term obligations with the assets that can be quickly and easily converted into cash.

The Quick Ratio Is Used to Determine an Entity's