Practice - Quick Ratio (Acid-Test Ratio)
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Practice Questions
Test your understanding with targeted questions
What is the formula for the Quick Ratio?
💡 Hint: Remember, Quick Assets exclude inventory.
What does a Quick Ratio of 1 signify?
💡 Hint: Think about how that reflects a company's ability to pay short-term debts.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What does a Quick Ratio of less than 1 indicate?
💡 Hint: Think about what the ratio measures.
True or False: The Quick Ratio always indicates the full liquidity position of a company.
💡 Hint: Consider what other factors might affect a company's liquidity.
3 more questions available
Challenge Problems
Push your limits with advanced challenges
Given the following information for Company X: Current Assets = ₹200,000, Current Liabilities = ₹80,000, and Inventory = ₹50,000. Determine the Quick Ratio and discuss its implications.
💡 Hint: Calculate Quick Assets first, then use the formula.
Company Y has a Quick Ratio of 0.9. What steps can the management take to improve its liquidity? Discuss potential strategies.
💡 Hint: Think about operational changes and financial strategies.
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