The Quick Ratio Differs from the Current Ratio in That

question 96

Multiple Choice

The quick ratio differs from the current ratio in that it

• A) represents the amount of cash on hand instead of the amount of working capital.
• B) is a stricter test of a company's ability to pay its current debts as they are due.
• C) excludes inventories and accounts receivable from the numerator of the fraction because of obsolescence and possible default on payment.
• D) is more difficult to calculate.

Examine the role of context, trust, and justice in negotiation processes.

Understand the strategic use of highlighting undesirable features in negotiations.

Identify the role of memory biases such as the primacy effect in persuasion.

Comprehend the significance of counterargument development during persuasion.

---

Definitions:

Current Ratio

A financial ratio indicating a firm's capacity to meet its short-term liabilities using its existing assets.

Current Assets

Current assets are assets that a company expects to convert into cash, sell, or consume within one year or its operating cycle, whichever is longer.

Retained Earnings

The part of net profits that is not distributed as dividends but is kept by the firm to reinvest in its fundamental operations or to settle debts.

Common Stock

Equity ownership in a corporation, with voting rights and the potential for dividends.