The quick ratio equals _____.
A)(total assets)/(annual net sales)
B)(total assets)/(total liabilities)
C)(current assets)/(total current liabilities)
D)(cash + accounts receivable)/(total current liabilities)

Question

Quizplus · Accepted Answer

The quick ratio is a measure of a company's ability to pay off its current liabilities with its most liquid assets. The quick ratio is calculated by dividing a company's current assets minus inventory (which is less liquid) by its current liabilities. Option D presents this calculation as (cash + accounts receivable)/(total current liabilities), making it the correct choice.

The Quick Ratio Equals _____