The Quick Ratio

question 83

Multiple Choice

The quick ratio:

• A)Is computed by dividing current assets by current liabilities.
• B)Is always higher than the current ratio.
• C)Cannot be higher than the current ratio.
• D)May be higher or lower than the current ratio.

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Definitions:

Personal Use

The use of a company's assets or services by an individual for their private needs, not for business purposes.

Income Ratio

A financial metric used to assess a company's ability to generate income relative to revenue, sales, assets, or equity.

Capital Balances

The amount of money or value of assets contributed by the owners or partners in a company, not including earnings or profits.

Service

An intangible product offered to customers that does not result in ownership of anything.