A Quick Ratio of More Than 1:1 Suggests That a Small

question 9

True/False

A quick ratio of more than 1:1 suggests that a small company is overly dependent on inventory and future sales to satisfy its short-term debt.

---

Definitions:

AFC (Average Fixed Cost)

The fixed costs (expenses that do not change with the level of production) divided by the quantity of goods or services produced, typically decreasing as production increases.

Marginal Cost

The cost increase that comes with producing an additional unit of a product or service.

Marginal Revenue

The heightened income realized from the sale of one more unit of a good or service.

Marginal Cost

The price involved in creating one more unit of a specific good or service.