ACCA FA · Chapter 14 · Question 1 of 10
A company has current assets of $84,000, including inventory of $30,000, and current liabilities of $48,000. What is its quick (acid test) ratio, to two decimal places?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) 1.13:1
Explanation
Quick ratio = (current assets - inventory) / current liabilities = ($84,000 - $30,000) / $48,000 = $54,000 / $48,000 = 1.125, which rounds to 1.13:1. The current ratio, including inventory, is $84,000 / $48,000 = 1.75:1.
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