Question

    For knowing the cash (liquidity) position of a company which of the ratio will be used?   

    A Debt Equity Ratio Correct Answer Incorrect Answer
    B Liquid Ratio Correct Answer Incorrect Answer
    C Capital Ratio Correct Answer Incorrect Answer
    D Quick Ratio Correct Answer Incorrect Answer
    E Fast Ratio Correct Answer Incorrect Answer

    Solution

    The quick ratio is a measure of how well a company can meet its short-term financial liabilities. Also known as the acid-test ratio, it can be calculated as follows: (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.

    Practice Next

    Relevant for Exams:

    ×
    ×