Based on the following data, what is the acid-test ratio, rounded to one decimal point?
A) 3.4
B) 3.0
C) 2.2
D) 1.8

Question

Based on the following data, what is the acid-test ratio, rounded to one decimal point? 
A) 3.4 
B) 3.0 
C) 2.2 
D) 1.8

Quizplus · Accepted Answer

The acid-test ratio is calculated by dividing the quick assets (cash, marketable securities, and accounts receivable) by current liabilities. Based on the given data, the quick assets are 33000 (cash) + 54000 (marketable securities) + 49000 (accounts receivable) = 136000. The current liabilities are 40000 (accounts payable) + 25000 (salary payable) + 27000 (taxes payable) = 92000. Therefore, the acid-test ratio is 136000/92000 = 1.48 which is rounded to 3.4 when expressed to one decimal point.

Based on the Following Data, What Is the Acid-Test Ratio