ACCA PM · Chapter 13 · Question 4 of 11
A company has current assets of $240,000, of which inventory is $90,000, and current liabilities of $150,000. What is its quick (acid test) ratio?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 1.0
Explanation
Quick ratio = (current assets - inventory) / current liabilities = ($240,000 - $90,000) / $150,000 = 1.0. The current ratio, which includes inventory, would be 1.6.
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