The quick ratio is a better measure of liquidity than the current ratio if the firm has current assets composed primarily of
A)cash.
B)inventory.
C)marketable securities.
D)accruals.

Question

Quizplus · Accepted Answer

The quick ratio excludes inventory from current assets, making it a better measure of liquidity when a firm's current assets are primarily composed of inventory, which may not be easily converted to cash.

The Quick Ratio Is a Better Measure of Liquidity Than