If a Firm's Quick Ratio Is Equal to Its Current

question 79

Multiple Choice

If a firm's quick ratio is equal to its current ratio:

• A) It has a low level of current liabilities.
• B) It has no inventory.
• C) It faces a potentially serious liquidity crisis.
• D) It is in a loss-making position.

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Definitions:

Sweden

A country in Northern Europe known for its high standard of living, comprehensive welfare system, and as a member of the European Union, but not using the euro as its currency.

Norway

Norway is a Nordic country located in Northern Europe, known for its extensive coastline, mountainous terrain, and significant oil reserves, which is one of the world's wealthiest nations per capita.

Socialist

refers to a political and economic theory of social organization which advocates for the means of production, distribution, and exchange to be owned or regulated by the community as a whole.

Price Mechanism

The way in which prices rise and fall to balance supply and demand, allocating resources efficiently in a market economy.