Which of the following is the most desirable quick ratio?
A) 1.20
B) 1.00
C) 0.95
D) 0.50

Question

Quizplus · Accepted Answer

The most desirable quick ratio is one that is above 1. A quick ratio of 1.20 indicates that the company has enough liquid assets to cover its current liabilities with some margin of safety. A ratio of 1.00 means that the company can just meet its current obligations. Ratios below 1.00 are considered risky as they suggest that the company may struggle to meet its short-term obligations.

Which of the Following Is the Most Desirable Quick Ratio