3 years ago

Quick Ratio

Business

1 answer:

Igoryamba3 years ago

3 0

Answer:

2015 - Quick ratio = 0.52

2016 - Quick ratio = 0.52

Explanation:

The quick ratio is a measure of how well a company can meet its short-term financial liabilities.

It is also known as the acid-test ratio.

It can be calculated as follows: (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities.
The simplest formula is

Quick ratio Formula

(Current assets - stock) ÷ current liabilities - this will be used in the calculations.

Current assets:

Cash and other assets that are expected to be converted to cash within a year.

Current liabilities: Current liabilities are a company's short-term financial obligations that are due within one year or within a normal operating cycle.

Workings:

2015 - Quick ratio:

Quick ratio = (Current assets - stock) ÷ current liabilities

Quick ratio = ($2,400 - $800) ÷ $3,050

Quick ratio = 0.52 (answer)

2016 - Quick ratio:

Quick ratio = (Current assets - stock) ÷ current liabilities

Quick ratio = ($2,300 - $650) ÷ $3,150

Quick ratio = 0.52 (answer)

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