Which of the Following Is Excluded When Calculating the Quick

question 176

Multiple Choice

Which of the following is excluded when calculating the quick ratio?

• A)accounts receivable
• B)accounts payable
• C)cash
• D)inventory

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Definitions:

Variable Cost

Expenses that change in proportion to the business activity or production volume.

Profit Margin

A financial ratio indicating the percentage of revenue that exceeds the costs associated with making or buying the goods sold.

DuPont Formula

A formula used to provide a detailed analysis of Return on Equity (ROE) by breaking it down into three major components: operating efficiency, asset use efficiency, and financial leverage.

Investment Turnover

A measure of a company's efficiency in using its investments in assets to generate sales revenue, calculated as sales divided by average total assets.