Why Do Banks Look at the Quick Ratio in Addition

question 40

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 assets are more liquid than the current ratio assets.

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Definitions:

Confucianism

An East Asian philosophy originating in China, focusing on ethics, morality, and social harmony, based on the teachings of Confucius.

Worldview

The overall perspective from which one sees and interprets the world, encompassing beliefs, values, and attitudes towards life and the universe.

Philosophy of Life

An individual's set of beliefs, values, and principles that guide their understanding of the world and their place within it.

Fundamentalist

A person who believes in the strict, literal interpretation of religious texts or doctrines, often leading to intense adherence to those beliefs.