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ivann1987 [24]
3 years ago
11

The current and quick ratios help us measure a firm's liquidity. The current ratio measures the relationship of the firm's curre

nt assets to its current liabilities, while the quick ratio measures the firm’s ability to pay off short-term obligations without relying on the sale of inventories. True or False?
Business
1 answer:
inysia [295]3 years ago
8 0

Answer:

True

Explanation:

Current Ratio: The current ratio shows a relationship between the current assets and the current liabilities. The formula is shown below:

Current ratio = (Total Current assets ÷ total current liabilities )

Quick Ratio: The quick ratio shows a relationship between the quick assets and the current liabilities. The formula is shown below:

Current ratio = (Quick assets ÷ total current liabilities)

where,

Quick assets = Current assets - inventories - prepaid insurance

So, the given statement is true

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fgiga [73]

Answer:

The correct answer is the option: False.

Explanation:

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<u><em>Explanation</em></u>:

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