Why Do Banks Look at the Quick Ratio in Addition

question 85

Multiple Choice

Why do banks look at the quick ratio in addition to the current ratio?

• A)The quick ratio assets are larger than the current ratio assets.
• B)The quick ratio is a better measure of how quickly liabilities are coming due.
• C)The quick ratio is easier to calculate.
• D)The quick ratio uses only the most liquid assets while the current ratio uses all current assets.

---

Definitions:

Office 365

A suite of productivity tools and services offered by Microsoft, including Word, Excel, PowerPoint, and cloud storage, delivered through a subscription model.

Subscription-based Service

A business model where customers pay a recurring price at regular intervals for access to a product or service.

Office Suite

A collection of productivity software programs, typically including word processing, spreadsheet, presentation, and email applications.

One-time Payment

A payment method involving a single transaction, as opposed to recurring payments.