What Does a Quick Ratio of Less Than One Typically

question 85

Multiple Choice

What does a quick ratio of less than one typically indicate?

• A)The company does not have enough quick assets to settle its current liabilities.
• B)The company is unprofitable.
• C)The company has a very high debt-to-equity ratio.
• D)All of the answer choices are correct.

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Definitions:

Cash Received

The total amount of cash received by a company during a specific period of time, from various sources.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, often used in investment and financial decision-making.

Compound Interest

Interest accumulation on a loan or deposit which is based on the principal amount as well as on all previously gathered interest from past periods.

Annuity

An investment vehicle designed to provide a consistent payment flow to a person, often employed to secure a steady income for individuals in retirement.