The Ratio of Quick Assets to Current Liabilities Is Known

question 67

Multiple Choice

The ratio of quick assets to current liabilities is known as which of the following?

• A)Working capital.
• B)Current ratio.
• C)Quick ratio.
• D)Cash coverage.

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Definitions:

Interest Income

The income earned from lending funds or investing in interest-bearing financial instruments, such as saving accounts, bonds, or loans.

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding costs related to production.

Law of Diminishing Returns

An economic principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Marginal Product

The additional output that is produced by employing one more unit of a particular input, keeping all other inputs constant.