The Rule of Thumb for the Quick Ratio Is 1:1

question 32

Multiple Choice

The rule of thumb for the quick ratio is 1:1.When would a quick ratio below this threshold not necessarily be a concern for a company?

• A) When accounts receivable balances are high
• B) When cash flows are steady and reliable
• C) When inventories are high
• D) None of these choices are correct

---

Definitions:

Individualistic Cultures

Societies that stress the importance of personal achievements and individual rights.

Pathogens

Microorganisms that cause disease in their host, including viruses, bacteria, fungi, and parasites.

Tradeoff

A situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Benefit

An advantage or profit gained from something.